Reserve Bank of Australia left rates unchanged at 2.50% – risk aversion pauses for a while.

4-Feb-2014, GMT 10:00

Reserve Bank of Australia left Official Cash Rate unchanged at 2.50% and suggested that current AUD/USD level is comfortable and supports balanced growth. Markets called statement neutral and funded broad lift for AUD. Risk sentiment gone bad in last couple of weeks, but recently we can notice hesitation on markets. EM currencies and stock indices were moving south for few weeks with Asian stocks being most heavy. Today we started with some pause but it could be calm before storm as well.

AUD basket shows dynamic appreciation today with decent resistance ahead. Main question that arise is “if sentiment will be enough for AUD to rally further above?”