RBA left rates unchanged during final meeting of 2019
The Bank said that international risks have lessened recently
AUDUSD closes in on the resistance zone ranging above 0.6860
The final RBA meeting of 2019 is already behind us and, in-line with market expectations, the Australian central bank decided to leave main interest rate unchanged at 0.75%. However, the Bank boosted AUD as it delivered some optimistic comments. RBA said that three rate cuts it has delivered since June boosted asset prices, what should lead to an increase in residential construction spending. Moreover, the Bank also highlighted that lower mortgage rates boosted disposable income of households, what could boost consumer spending. Speaking of risk, RBA said that it remains tilted to the downside but has lessened recently. It could be reference to still uncertain Sino-US Phase One agreement. Such remarks caused market odds of a rate cut in February to decline. The market still assess probability of such move as more than 50% but commercial banks may reconsider their calls for QE launch next year. Meanwhile, Australian dollar is benefiting from RBA’s optimism and trades as the strongest G10 currency on Tuesday morning. AUDUSD is building on gains made after release of upbeat Chinese PMIs and closes in on the resistance zone ranging above 0.6860 handle.
AUDUSD is closing in on the resistance zone ranging above the 0.6860 handle. However, the key resistance - 200-session moving average (purple line) - can be found slightly higher at around 0.6880. Note that this moving average has seen numerous price reactions (yellow circles) and has acted as a final resistance for the past year and a half. Source: xStation5