Australian Dollar buoyed by strong economy
The flagging Australian Dollar received a boost from the release of certain economic data, which seemed to paint an upbeat picture of the Australian economy. Australia recorded real GDP growth of 2.7%, marking the 14th consecutive year of economic expansion. In addition, Australian companies are realizing record profits, which they have promptly reinvested to drive growth. Coupled with falling energy prices and low levels of inflation, increased corporate investment signals Australia’s economy is in excellent shape. Forex traders reacted positively to the economic data and the subsequent decision by the Bank of Australia to maintain interest rates at current levels. The Financial Times reports:
The news, combined with Wednesday’s decision by the Reserve Bank of Australia, the central bank, to hold interest rates steady, helped nudge up the Australian dollar toward 77 cents against the greenback, outperforming other major currencies.
