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AUD rebounds modestly in Asian trading session - BTMU

FXStreet (Łódź) - Lee Hardman, FX Analyst at the Bank of Tokyo Mitsubishi UFJ remarks that AUD/USD rose overnight following the release of better than expected Retail Sales numbers for September.

Key Quotes

"The Australian dollar has rebounded modestly in the Asian trading session with AUD/USD bouncing off support from the intra-day low from early last month at around 0.8640, although it still appears more vulnerable to the downside again in the near-term."

"The Australian dollar has derived support overnight from the release of the stronger than expected Australian retail sales report for September which revealed that sales increased sharply by 1.2% lifting the annual rate of growth to 5.7%."

"There is little evidence yet of spending being undermined by the hit to household’s real incomes which is being offset for now by the positive wealth effect from rising house prices. Household goods sales increased by 4.1% in September."

"The sharp 11% drop in building approvals in September, which was the largest decline since July 2012, may suggest that the housing market activity is beginning to soften which could begin to undermine support for retail sales ahead."

"The RBA presented an unchanged monetary policy stance after their meeting overnight leaving their key policy rate unchanged at 2.50% for the fifteenth consecutive month. There were also very little changes in their policy statement retaining the forward guidance that 'on present indications, the most prudent course is likely to be a period of stability in interest rates'. The RBA also reiterated their view that the Australian dollar 'remains above most estimates of its fundamental value' particularly given the further declines in key commodity prices in recent months."

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