Australian Dollar Extends Gains to 3-Month High Following Central Bank Minutes By FXNEWSTODAY

FXNEWSTODAY – The Australian dollar rose in the Asian market on Tuesday against a basket of global currencies, expanding its gains for the third day in a row against its American counterpart, recording the highest level in three months, following the release of the minutes of the last monetary policy meeting of the Reserve Bank of Australia.

The minutes include more stringent comments than expected in the markets, which enhances the possibility of raising Australian prices by about 25 basis points during the next December meeting, for the second meeting in a row.

Australian Reserve Governor Michelle Bullock said that inflation represents a major challenge for the Australian economy over the next two years.

Australian dollar exchange rate today

The Australian dollar rose against its American counterpart by 0.50% to 0.6587, the highest since last August 10, from today’s opening price of 0.6557, and recorded the lowest level at 0.6553.

Yesterday, Monday, the Australian dollar rose by 0.65% against the US dollar, the second daily gain in a row, benefiting from the continued decline in the levels of the US currency against a basket of major and minor currencies.

Australian Reserve Minutes

The minutes of the Reserve Bank of Australia’s monetary policy meeting held on November 7 were released in Sydney, which resulted in raising Australian interest rates by about 25 basis points to 4.35%, the highest level in 12 years, in line with market expectations. Below are the most prominent comments. Minutes:-

•We have taken into account the necessity of raising or stabilizing interest rates

•We saw that the justification for raising interest rates was the strongest given the increasing risks of inflation.

•If further tightening is needed will depend on data and risk assessment.

•We saw the risk of inflation expectations increasing if interest rates are not raised.

•It is important to prevent a modest increase in inflation expectations.

•We noted that experts’ inflation expectations at the meeting assume one or two increases in interest rates.

•The Board noted that the cash interest rate remained lower than in many other countries.

Michelle Bullock

Australian Reserve Governor Michelle Bullock said on Tuesday: Inflation represents a critical challenge for the Australian economy over the next two years. Bullock added: I do not buy the idea that monetary policy is no longer useful.

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