Aussie climbs following RBA minutes

The Australian dollar has advanced versus its US counterpart in forex trading markets today (October 21st), following comments from the Reserve Bank of Australia (RBA) and positive industrial production data from China. 

Minutes from the bank's latest policy meeting show it believes the currency is currently too strong to help in the rebalancing of the country's economy, while policymakers also discussed the need for high street lenders to maintain high standards.

Policymakers expressed concerns over-exuberant lending is causing house prices to surge, with latest figures showing residential property prices rose by 10.1 per cent year on year in the second quarter. 

The RBA said: "Members noted that the current setting of monetary policy was accommodative, with lending rates remaining very low and continuing to edge lower over recent months as competition to lend had increased.

"In this context, members discussed the importance of lenders maintaining strong lending standards and the ongoing dialogue between the bank and the Australian Prudential Regulation Authority on the matter."

Demand for the Aussie was also supported after it was revealed industrial production in China increased at an annual pace of eight per cent last month, beating expectations for a gain of 7.5 per cent. This follows a 6.9 per cent rise in August. 

Separately, it was revealed the Chinese economy expanded by 7.3 per cent annually in the three months to the end of September. Although this is down from the 7.5 per cent growth recorded in the second quarter and is the slowest pace recorded since Q1 of 2009, it is above the consensus estimate for a 7.2 per cent advance. 

The Asian nation is Australia's largest trading partner, meaning these figures have a strong impact on its currency. In the RBA minutes, policymakers noted they have received a briefing from Beijing indicating it will ease monetary policy "if required to support gross domestic product growth".

Following the release of the minutes, the Australian dollar rose to 0.8828 versus the greenback - the pairing's highest since October 16th.