Aussie Strengthens After RBA Cuts Rates To 3
The Reserve Bank of Australia decided to lower the cash-rate target to 3%, down from 3.25% as predicted by Bloomberg. The cut in the rate is said to help maintain growth and lower risks.
The Australian dollar rose 0.3% against the US dollar, but news of a drop in building approvals and an account deficit that was larger than expected put a dampener on the Aussie. Permits granted to build houses dropped 7.6% from last month. The current account deficit widened to 14.9 billion Australian dollars from 12.4 billion.
There has also been new optimism over Greece and Spain's financial situations which helped to support sentiment. Yesterday Greece launched a buy-back scheme for its debt and Spain officially requested for EU funds for its ailing banking sector. These bailout funds are going to be released on December 12th.