The Australian dollar today strengthened against the US dollar in the Asian session after the decision of the Reserve Bank of Australia and its comments on further economic prospects.
According to the data, the Reserve Bank of Australia left the key interest rate unchanged at 1.50%, which fully coincided with the forecast of economists. Such a decision supported the Australian dollar and instilled confidence in investors, who are better further interest rate hikes in the medium term.
Despite this decision, the RBA's comments were less optimistic, although they also did not go against the experts' expectations.
The regulator said that the current level of interest rates is consistent with inflation and GDP targets, as recent data indicate a gradual acceleration of the country's economic growth. This suggests that there is currently no need for low interest rates, which will continue to support the Australian dollar.
The RBA also expects that a decline in investment in the mining sector will soon come to an end, as investment prospects outside the mining sector have recently improved.
As for the unemployment rate, economists expect the central bank to further reduce it in the next few years, as business conditions become more favorable.
The housing market remains also an important goal for the RBA, which it intends to resolve in the near future. According to the forecast, the housing market situation continues to vary, and the current low interest rate will negatively affect the mortgage market, gradually leading to its overheating.
Also in the RBA are concerned that the high rate of the Australian dollar will contribute to low price pressures and will have a significant impact on GDP growth and employment in the future.
Taking the economic assessment from the RBA as a whole, it did not change significantly from the previous one, which is likely to keep demand for the Australian dollar for medium-term investors aimed at overcoming the level of 0.8070 with an exit to 0.8150 and 0.8220.
Support for the AUDUSD pair today was also provided by data on the growth rate of activity in the service sector of China.
According to the report of Caixin Media Co. and the company Markit, the index of supply managers for the service sector of China rose in August this year to a level of 52.7 points from 51.7 points in July. The index reading above 50 indicates an increase in activity compared to the previous month.