The Australian dollar has continued its winning streak today, racking up a 4th straight day of gains on the back of better than expected GDP figures which dimmed expectations of a rate cut in the nearest future.
Gross domestic product rose by by 0.3 percent in the 2nd quarter of the year bringing the total to 1.7 percent from a year earlier as reported by the Australian Bureau of Statistics.
The figures came in above analysts’ expectations and may be enough to keep a rate cut off the table for the time being.
The news follows on from yesterday’s decision from the RBA to keep interest rates on hold at 1.5 percent and the following statement they provided showed they were in general, satisfied on the direction the economy was heading, especially the jobs market,
Indicators of the labour market remain mixed. Employment growth has been stronger over recent months, although growth in total hours worked remains weak. The various forward-looking indicators point to continued growth in employment over the period ahead” noted RBA governor Philp Lowe.
With the Australian dollar now sitting comfortably above the US75c mark some believe it’s a good time to sell as the threat of higher interest rates in the US and lower commodity prices are expected to bring the local currency under pressure,
"With the Fed set to raise rates next week and commodity prices expected to weaken as we move through the end of the year, strength into the US75.00¢/75.50¢ region is seen as a sell opportunity." noted Westpac chief currency strategist Robert Rennie