Australian dollar stronger after RBA rate decision

THE Australian dollar remains above 78 US cents after the Reserve Bank’s surprise decision to keep rates on hold at 2.25 per cent.

THE Australian dollar remains above 78 US cents after the Reserve Bank’s surprise decision to keep rates on hold at 2.25 per cent.

At 0700 AEDT on Wednesday, the local currency was trading at 78.21 US cents, down from 78.35 cents on Tuesday.

The central bank defied expectations by keeping rates on hold on Tuesday following February’s 25 basis point cut, with the surprise decision lifting the Australian dollar above 78 US cents.

“No change from the RBA resulted and was enough to see the Australian dollar spike higher,” National Australia Bank senior economist David de Garis said.

“No change was no change but the attachment of an easing bias had the market second guessing about the timing of a follow-up rate cut to last month’s.

“The Australian dollar/US dollar has retained those higher levels overnight but has not broken through resistance at 78.50 US cents, instead consolidating in early trading this morning.” Coming up on Wednesday, all eyes will be on economic growth figures being released by the Australian Bureau of Statistics at 1130 AEDT.

Originally published as Australian dollar stronger after RBA rate decision