Australian Dollar Climbs After Strong China Data, RBA Minutes
15 September 2020 - 1:04PM
RTTF2
The Australian dollar advanced against its major counterparts in
the Asian session on Tuesday, as better-than-expected China retail
sales and industrial production for August suggested sustained
recovery in the world's second largest economy.
Data from the National Bureau of Statistics showed that China's
industrial production rose 5.6 percent on year in August.
That beat expectations for an increase of 5.1 percent and was up
sharply from the 4.8 percent gain in July.
The retail sales advanced an annual 0.5 percent - also topping
expectations for a flat reading after slipping 1.1 percent in the
previous month.
The minutes from the the Reserve Bank of Australia's September 1
meeting showed that the members judged that its unprecedented level
of fiscal easing has played a key role in helping to sustain the
Australian economy.
The members added that they intend to maintain its highly
accommodative stance as long as necessary.
At the meeting, the RBA held the country's benchmark lending
rate steady at the record low 0.25 percent but increased the size
of the Term Funding Facility. Under the expanded Term Funding
Facility, authorized deposit-taking institutions will have access
to additional funding, equivalent to 2 percent of their outstanding
credit, at a fixed rate of 25 basis points for three years.
The aussie jumped to 0.7336 against the greenback, its biggest
level since September 3. The aussie is seen finding resistance
around the 0.75 level.
The aussie spiked up to a 5-day high of 1.6219 against the euro
and a 4-day high of 77.50 against the yen, from its early low of
1.6327 and 6-day low of 76.79, respectively. The next key
resistance for the aussie is likely seen around 1.58 against the
euro and 80.00 against the yen.
The aussie advanced to nearly a 2-week high of 0.9639 against
the loonie, compared to Monday's closing value of 0.9602. On the
upside, 0.98 is likely seen as the next resistance level for the
aussie.
The aussie reached as high as 1.0911 against the kiwi and held
steady in subsequent deals. The pair had ended Monday's trading at
1.0876.
Looking ahead, German ZEW economic sentiment index for September
is due in the European session.
U.S. industrial production and export and import prices for
August and New York Fed's empire manufacturing index for September
will be released in the New York session.
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