AUD/USD Remains Above 0.7250 after RBA Sits Again

The Reserve Bank of Australia has left official interest rates unchanged for a seventh straight month, amid fresh evidence the economy is benefiting from a lower dollar. Board members met in Perth on Tuesday and kept the overnight cash rate at 2 per cent, as was anticipated by financial markets and analysts.

Governor Glenn Stevens signalled last week that there was unlikely to be a change after urging markets to “chill out” in the lead-up to Christmas. There was speculation ahead of the rate decision that the Reserve Bank could adjust its language around the Australian dollar, which has been surprisingly resilient despite steep falls in commodity prices.

Since hitting a six-year low of US68.96¢ in September, it has rallied to above US72¢, while the price of iron ore has tumbled about 30 per cent. The currency was slightly lower at US72.53¢ after the decision was announced.