Australian currency outperformed its counterparts in the foreign exchange market after the unexpected decision of the central bank (RBA) to keep interest rates unchanged.
After a drop of a quarter point in October, the Australian institution chose the status quo for its minimum bid rate to 3.25%. The announcement surprised the investors while economists expected a further easing. The RBA argues the recent improvement in the global economy, helped by a moderate U.S. growth and stabilization of activity in China, a major consumer of australian products. Despite the decline in commodity prices, the main resource of the island continent, and a slowdown of employment, Australia growth is well-oriented while inflation is consistent with the objectives.
The central bank can be easily taken any measure in case of worsening of the situation in Europe. Remember that Australia has the highest rate among developed countries.
In addition, Americans also opted for stability. The new success of Barack Obama in the presidential election confirmed its policy, notably the weakness of US dollar.
Technically, the RBA decision has allowed the Australian dollar up from 1.0365 to 1.0430. However, it is likely to the AUD falls to USD 1.0412, which would allow us to take a long position at a price more attractive for a return to our mid-term resistance at USD 1.0571.