At 0430GMT the Reserve Bank of Australia (RBA) announce the results of today’s monetary policy meeting. No one expects any change in the cash rate target, its at 2.5% and has been since August of 2013 when the RBA shaved off 25 basis points.
With no rate action expected, attention will turn to the accompanying statement to decipher the nuances of central bank thinking.
In summary, the main points from the previous meeting:
- Sees likely period of interest-rate stability
- Says $A is high by historical standards
- Recent data foreshadows solid expansion in housing construction
- Labour demand remains weak
- Expects unemployment rate to rise a little further in the near term
- Recent rise in AUD will reduce the assistance to the economy from its 2013 decline
I can’t see anything much in recent data to have much of a change to the accompanying statement. If the statement remains pretty much the same, as I expect, then I’m looking for continued range-bound trading in the AUD, sellers above 0.93 initially and again around 0.94 …. bids are coming in solid around 0.9200 (I’ll have more orderboard detail coming up).
Yesterday’s private sector inflation data raised a few eyebrows, and while I expect the RBA will pay it heed, it is too early to expect too much concern from them just yet.