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6 Aug 2013
Flash: AUD/USD climbs towards 0.9000 on RBA rate cut - BTMU
FXstreet.com (Barcelona) - Lee Hardman, FX Analyst at the Bank of Tokyo Mitsubishi UFJ notes that the The Australian dollar has strengthened in the Asian trading session with AUD/USD rising back towards the 0.90-level as the RBA lowered its key policy rate by 0.25 point to 2.50% as expected overnight.
Key Quotes
“However in the accompanying statement the RBA did not provide a clear signal that further monetary easing may be required dampening market expectations for further interest rate cuts in 2013.”
“At the July meeting the RBA noted that “the inflation outlook, as currently assessed, may provide some scope for further easing”, which after today’s rate cut the RBA notes only that it “will continue to assess the outlook and adjust policy as needed to foster sustainable growth in demand and inflation outcomes consistent with the inflation target over time”.”
“The RBA did not signal greater concern over upside risks to inflation resulting from the recent decline in the exchange rate with inflation expected to remain consistent with their medium-term target over the next one to two years.”
“Further RBA easing is still possible although it will likely prove modest. The RBA also reiterated that the Australian dollar remains at a high level despite its around 15% decline since early April noting that it is possible that the exchange rate will depreciate further over time.”
“The Australian dollar is also deriving some support from tentative evidence that global growth appears to be rebounding.”
Key Quotes
“However in the accompanying statement the RBA did not provide a clear signal that further monetary easing may be required dampening market expectations for further interest rate cuts in 2013.”
“At the July meeting the RBA noted that “the inflation outlook, as currently assessed, may provide some scope for further easing”, which after today’s rate cut the RBA notes only that it “will continue to assess the outlook and adjust policy as needed to foster sustainable growth in demand and inflation outcomes consistent with the inflation target over time”.”
“The RBA did not signal greater concern over upside risks to inflation resulting from the recent decline in the exchange rate with inflation expected to remain consistent with their medium-term target over the next one to two years.”
“Further RBA easing is still possible although it will likely prove modest. The RBA also reiterated that the Australian dollar remains at a high level despite its around 15% decline since early April noting that it is possible that the exchange rate will depreciate further over time.”
“The Australian dollar is also deriving some support from tentative evidence that global growth appears to be rebounding.”