Following the end of a meeting, on Tuesday morning the Reserve Bank of Australia decided to leave their monetary policy unchanged. The base rate for the country remains at 2%. The governor of the central bank is not excluding further loosening of monetary policy if the economic situation worsens. In just seven hours, the AUD/USD rate rose by 100 points to 0.7384.
The Aussie gave cause for optimism to buyers in other currency pairs. The pound/dollar rose all the way to 1.5617 before the release of UK stats. The British let us know that business activity fell in June and with this news the pound/dollar cross fell by 39 points to 1.5568. It’s not all bad for the pound though as it is looking to return to 1.5625. The July business activity index in the construction sector stood at 57.1 (forecasted: 58.4, previous: 58.1).
The pound/dollar is still trading in Monday’s range, whilst the euro/dollar has risen from a minimum of 1.0932 to 1.0981. The euro is deriving strength from its crosses. I believe that the eurobulls will make it to 1.1010 with consummate ease. Although, they need to make it before 17:00 EET. This is when the US is publishing its July manufacturing orders. Strong data could send the euro back to 1.0950. In this case it’ll be possible to close at the balance point 1.0975/80.