AUD/USD at 0.8945 and Aiming for Solid Finish

The Australian dollar held near recent highs on Friday after the central bank raised its forecasts for economic growth and inflation, putting the currency on track for the largest weekly gain since September.

The Aussie cooled off slightly to $0.8938 after trading at $0.8964 in early deals, but was not far off a four-week peak of $0.8981 touched Thursday.  It has gained around 2.1 percent so far this week after the Reserve Bank of Australia (RBA) dropped its easing bias and scaled back its verbal rhetoric for a lower currency.

Earlier in the session, the Aussie briefly edged higher after the release of the RBA’s quarterly monetary policy report. The central bank again reiterated that rates were likely to remain steady for a while as stimulatory policy and a weaker local dollar were working to support the economy.

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