The aussie dollar continued its upward trend yesterday, pushing on nearly one percent against the pound following bullish words from an RBA official.
- The Australian dollar rose as a Reserve Bank of Australia official said a move to “more normal” interest rates was appropriate, indicating that the yield gap may widen further.
- Philip Lowe, assistant governor of the RBA, also mentioned at the conference in Sydney that it was “appropriate” to remove monetary stimulus as the economy improves boosting demand for higher-yielding assets.
- The Australian currency also traded strongly during the Asian session with demand high as both the Nikkei and Shanghai Composite indices traded strongly.
- The RBA minutes from their most recent policy meeting, released early this morning, had a hawkish tone, which reinforced views of a steep interest rate hike next month.
- However, the aussie, which has broadly strengthened in response, is currently trading just marginally higher against the pound, with the price currently around 1.7650.