The Aussie Extends Its Rally Against The Greenback After the RBA Holds Rate
The Australian dollar extended an advance versus its American counterpart on Tuesday after the Reserve Bank of Australia’s decision on policy.
The pair AUDUSD rose another 0.35 percent after having increased for two days in a row. The pair has been boosted partly by a weak greenback as U.S. economic data released on Monday missed market’s expectation.
According to the U.S. Bureau of Economic Analysis, U.S. consumer spending was unchanged in March for a second straight month. Due to the weak domestic demand in the first quarter, the result was below analysts’ forecast calling for a 0.2 percent advance and directly sent the overall monthly inflation rate to a negative territory for the first time in a year.
The core PCE index fell 0.1% in March compared with the previous month, in line with expectations. On a yearly basis, the rate declined to 1.6% from 1.8%.
US manufacturing was also reported to grow slower than forecast in April. As stated by the Institute for Supply Management, the Institute for Supply Management slid to 54.8 from 57.2, missing expectation for a reading of 56.5 due to less hiring and a slower pace of incoming orders.
On the other hand, Australia’s central bank left its cash rate at 1.5 percent on Tuesday. The result came amidst optimism over faster domestic inflation and an upswing in global growth.
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