- RBA kept rates on hold at 2.50%
- RBA: Prudent course is a period of stability in interest rates
- Australia’s building approvals jumped by 11.4% vs. 5.2% in Oct
- Japanese average cash earnings up by 0.5% y/y vs. 0.8% forecast
As expected, the RBA decided to keep monetary policy unchanged while emphasizing that the prudent course would be to have a period of stability in interest rates. AUD/USD reacted positively to the event, with the pair up by 0.39% so far. The 11.4% jump in Australian building approvals also added support for the Aussie, as the actual reading was more than twice as much as the estimated 5.2% gain for October.
AUD/JPY is up 0.52% and is around 10 pips shy of the 101.00 handle while EUR/AUD is down 0.36% and GBP/AUD is looking at a 0.24% loss. Kiwi pairs are trading more carefully, as forex traders are sitting tight ahead of the New Zealand dairy auction later today. Another drop in milk prices might lead to a sharp selloff for the New Zealand dollar, as this would spark speculations of lower payouts for farmers and dairy suppliers.
In Japan, the average cash earnings report was weaker than expected at a 0.5% annualized gain versus the projected 0.8% increase. To top it off, the previous month’s reading was downgraded from 0.8% to 0.7%, reflecting weaker wage pressures. USD/JPY is up 0.01% so far at the 118.40 level while EUR/JPY and GBP/JPY are flat.
Up ahead, the forex calendar shows that there are a couple of medium-tier reports from the United Kingdom and the euro zone. Spain is set to print its unemployment change report and possibly show a 21.3K increase in joblessness, smaller than the previous 79.2K rise. Meanwhile, the U.K. construction PMI due 10:30 am GMT is slated to show a dip from 61.4 to 61.1, although an upside surprise is possible.
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