Australia keeps interest rates at 4.5 %
RBA, The Reserve Bank of Australia, decided on Tuesday to keep the interest rates unchanged for the third month in a row. We continue to see strong numbers for Australian employment and growth, and expect AUD to continue being strong against the USD with many carry traders moving to the pair (USD/AUD).
Strong growth among Australia’s trading partners
Economic data for the June quarter indicate strong growth, around 6 %, for Australia’s major trading partners. China, Japan and Korea had a stronger growth than expected, while the US economy grows less than expected.
Economic conditions in Australia
First, the Australian labour market has continued to show more jobs, while employment increased by over 46 000 jobs in June, growing 3.25 % since 2009. Unemployment rates decreased to 5.1 % from 5.85 % a year earlier. CPI data for June shows further decline in underlying inflation, in line with RBA’s earlier forecasts. The CPI inflation was 3.1 in June, while the underlying inflation was stable at 2.75 %. Australian inflation forecasts by the Reserve Bank of Australia remains at the same levels for 2011-2012.
Many reputable currency analysts expect the Australian Dollar (AUD) to remain strong against the major currencies.
