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Market Update

Rates on Hold Australia, RBA Says Dollar Overvalued


Author: Marcus Jacob
ticker.com
Last Update: 11:02 AM ET December 02 2014

5:30 PM Sydney – The Reserve Bank of Australia left its benchmark rate unchanged at 2.5% and reiterated that the Aussie dollar is above its fundamental level. Current account deficit narrowed to $12.5 billion in the third-quarter. Seasonally adjusted new buildings approvals increased 11.4% in October.

Stocks in Sydney jumped following a rebound in gold and oil prices and The Reserve Bank of Australia left its key rate on hold as expected.

The Reserve Bank of Australia left its benchmark interest rate on hold at 2.5% for the sixteenth consecutive month in a row.

The decision was widely expected and the central bank focused on the health of the global economy and repeated its earlier comments that the Aussie dollar remains “above its fundamental value.”

On the economic front, official data showed that current account deficit in the third-quarter narrowed by 10.1% to $12.5 billion compared to $13.9 in the second-quarter, on the surplus in goods and services.

The Australian Bureau of Statistics reported seasonally adjusted total number of building approvals in October increased 11.4% from 11.2% fall in September.

Australian dollar closed at 85.12 U.S. cents and in stock-trading turnover dropped to 874 million shares worth $5.2 billion.

ASX 200 Index jumped 73.60 or 1.4% to 5,281.30 and broader All Ordinaries Index climbed 69.30 to 5,260.

In commodities trading, gold soared US$52 to US$1,152 an ounce and light crude oil increased $2.85 to US$69 a barrel.

Australian Stock Movers

Alumina Limited soared 5% to $1.68 after the aluminum and bauxite producer completed the stake sale of 55% in Jamalco alumina refinery in Jamaica to Noble Group for US$140 million.

Sydney Airport Holdings Ltd gained 1.8% to $4.50 and the airport authority opened up the first stage of parking facility upgrade at Terminal 1 before the holiday season.

Villa World Ltd slipped 1.6% to $1.79 after the residential developer announced a deal to acquire two sites in South East Queensland for $13.65 million and from the deal, it expected to earn 182 residential plots.

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Sources: Data collected by 123jump.com and Ticker.com from company press releases, filings and corporate websites. Market data: BATS Exchange. Inc