The ‘Aussie’ strengthened against a basket of currencies due to better-than-expected trade data but failed to maintain those gains as the market’s attention focuses on a number of upcoming Central Bank meetings.
The ECB and Bank of Japan as well as the Bank of England are due to hold policy meetings over the coming days. The nation’s trade deficit narrowed to $178 million in February compared with a deficit of $1.2 billion in January. Stronger iron-ore prices have helped drive up the value of exports in February by 3% despite cyclones disrupting production in mining states as Western Australia and Queensland.
“With several key events due for the remainder of the week on the global economic calendar traders are reluctant to make any pre-emptive moves higher,” CMC Markets currency strategist Tim Waterer said.
The currency was also supported by Australian Treasurer Wayne Swans decision to extend the term of Reserve Bank Governor Glenn Stevens as the government hopes to maintain stability in the market ahead of elections due to be held in five-months time. Stevens was due to step down on September the 17th, just days after the election but his seven-year term was extended for a further three years at the request of the governor.
“There’s no doubt that Glenn has made an enormous contribution to Australia’s economic performance and financial stability since his appointment seven years ago,” Swan said. “He is in particular recognized around the world as a key policy maker and one of the best.”
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