Australian Dollar to US Dollar (AUD/USD) Exchange Rate Holds Gain Despite CPI

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Australian Dollars (AUD)

Earlier in the week the Australian Dollar to US Dollar exchange rate strengthened in response to unexpectedly strong growth and industrial production data from China.

The ‘Aussie’ was able to hold on to gains on Wednesday despite a decline in Australia’s Westpac Leading Index and Conference Board Leading Index. The former measure shed -0.1% on the month while the latter gauge lost -0.2%.

AUD/USD Trends Higher even as US Inflation Rises

The AUD/USD exchange rate also continued trending higher after the pace of inflation in Australia was shown to have slowed in the third quarter of the year. The nation’s Consumer Price Index eased from 3.0% on the year in the second quarter to 2.3% in the third quarter. Slowing inflation would give the Reserve Bank of Australia more leeway to leave interest rates at record lows.

According to one industry expert; ‘The idea that rates are low here from a domestic perspective is absolutely true… but benchmarked against the rest of the world we still actually have relatively high interest rates.’

During the North American session the US Dollar advanced on many of its most traded currency counterparts in response to the news that inflation in the US didn’t stagnate in September as expected. Consumer prices increased 0.1% on the month and came in at 1.7% on the year instead of declining to 1.6%.

Although the ‘Greenback’ did post widespread gains, the AUD/USD exchange rate remained 0.3% stronger.

The Australian Dollar to US Dollar (AUD/USD) exchange rate is currently trending in the region of 0.8792.

AUD/GBP Advances after BoE Meeting Minutes

The Australian Dollar to Pound Sterling exchange rate achieved a high of 0.5454 on Wednesday after the Bank of England published pessimistic policy meeting minutes.

The minutes revealed the same 7:2 split vote on interest rates as in the previous two meetings.

Despite this modest show of hawkishness, Monetary Policy Committee members were downbeat on the prospect of the Eurozone heading toward a triple dip recession and the impact this would have on the UK.

Also pushing the Pound lower was the insinuation that the current lack of inflationary pressure in the UK undermined the need for an immediate or near-term interest rate increase.

Overnight Australia’s NAB Business Confidence measure could cause AUD/GBP volatility.

Further movement in the pairing could occur on Thursday after the UK publishes its retail sales report. If sales are shown to have declined in September, as economists have forecast, the Pound could extend today’s declines.

The Australian Dollar to Pound Sterling (AUD/GBP) exchange rate is currently trending in the region of 0.5435.

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