Aussie regains value on strong growth rate of 0.6%

Sterling gained nearly 3 cents (1.3%) against the aussie yesterday, following cautionary words from the Reserve Bank of Australia.

• Sterling made strong gains against the aussie yesterday with the RBA’s dovish statement outweighing weak economic data in the UK.
  
• The RBA at their latest meeting held interest rates at 3.0%, which, although an expected decision, was accompanied by a statement that said the low rate was appropriate, countering more aggressive speculation.
  
• Those investors that had aggressively priced in the idea that Australia would increase rates trimmed their holdings putting selling pressure on the aussie and enabling the pound to close at 1.9553.
  
• However, data released this morning revealed that Australia’s economy expanded at a higher rate than expected in the second quarter, which has driven the pound back down in trading this morning.
  
• The 0.6% growth exceeded the 0.3% forecast and has strengthened demand for the aussie, with sterling already down 0.75% on yesterday’s close.