Australian dollar buffered by short covering after RBA keeps rates at 2 per cent

If the Reserve Bank of Australia thought some timid talk would be enough to send the Australian dollar lower, they were wrong.

The currency rallied before settling at around US76¢, the same level it commanded before the RBA policy decision. Foreign exchange experts attributed the immediate rise to a short squeeze where traders who were betting governor Glenn Stevens would jawbone more forcefully had to cover their positions.