The Australian dollar has rallied above 95 US cents on the back of strong retail and house prices data.

At 0700 AEDT on Tuesday, the local unit was trading at 95.07 US cents, up from 94.88 cents on Monday.
Data released by the Australian Bureau of Statistics on Monday showed retail spending rose 0.8 per cent in September, beating economists’ expectations of a 0.4 per cent rise.

Capital city house prices rose 1.9 per cent in the September quarter and 7.6 per cent in the year to September.

Investors had taken solace from the better economic reports, BK Asset Management managing director Boris Schlossberg said.

“Retail sales numbers jumped 0.8 per cent versus 0.4 per cent eyed, showing steady improvement in economic demand down under,” Mr Schlossberg said.

“The market now fully expects the Reserve Bank to remain stationary for the foreseeable future, given the pickup in consumer demand and much better housing activity data.”

The Reserve Bank of Australia meets on Tuesday for its monthly board meeting and interest rate decision.

AAP