Aussie dollar jumps to over 4-month high against SGD

TOKYO — The Australian dollar jumped on Tuesday (Sept 6) against most major currencies as the nation’s central bank kept interest rates unchanged at a record low.

At 3.30pm (Singapore time), A$1 was trading at S$1.0379, up 0.87 per cent from S$1.0288 at the start of trading. This was a level not seen since April 26 this year.

The Reserve Bank of Australia has cut rates twice in the past four months, including by 25 basis points in August, in a bid to boost sluggish inflation as the economy transitions towards non-resources growth after a mining investment boom.

But on Tuesday, the RBA left borrowing costs at 1.50 per cent, a widely expected decision as the bank waits to judge the impact of previous cuts.

The Aussie jumped 0.90 per cent to 76.50 US cents in Tokyo after the decision.

The greenback was trading in a narrow range after the previous day’s drop with doubts over a US interest rate hike this month dominating the market’s focus.

Dealers were still unsure about the ramifications of Friday’s data showing a healthy increase in US jobs — indicating an improving economy — but not strong enough to justify an imminent rate rise.

The news halted a rise in the US dollar, which rallied last week in response to comments from Fed boss Janet Yellen suggesting the economy was showing enough improvement to withstand an increase.

Many analysts now forecast a rate rise either in December of January. AFP WITH ADDITIONAL REPORTING BY TODAY