Australia dollar had its biggest weekly gain since 2011 after industrial output data today added to signs of economic stabilization in China, the South Pacific nation’s largest trading partner. The currency rose for a fifth day as the Reserve Bank damped expectations for further easing after cutting its key interest rate to a record low this week. In its Statement on Monetary Policy today, the central bank reduced its outlook for growth. “The industrial production number was the one that everyone was looking for; it’s been a good read on the real economy and it blew expectations out of the water,”said Chris Weston, chief market strategist at IG Markets Ltd. in Melbourne. “This is good news for Australia.” The Reserve Bank of Australia said in its quarterly policy outlook that gross domestic product will grow 2.25 percent in the year to December 2013, compared with 2.5 percent forecast three months earlier. Core consumer prices will rise 2.25 percent in the year to June 2014, below the mid-point of the central bank’s 2 percent to 3 percent target. “There was little forward guidance but we would argue that this is captured in the macro forecasts as well as the highlighted risks,” Su-Lin Ong, Sydney-based head of Australian economic and fixed-income strategy at Royal Bank of Canada, wrote in an e-mailed note to clients. “An implicit easing bias is evident.” The release comes three days after the RBA cut the key rate to an all-time low of 2.5 percent. Governor Glenn Stevens said in a statement after the decision that the board “will continue to assess the outlook and adjust policy as needed to foster sustainable growth in demand and inflation outcomes consistent with the inflation target over time.”
Posted on: Sat, 10 Aug 2013 00:06:48 +0000
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