RBA announces its latest monetary policy decision - 2 July 2019
- Prior 1.25%
- Says rate cut will help to make inroads into spare capacity
- Says rate cut will help achieve progress towards inflation target
- Says rate cut is to support jobs, bring inflation back in-line with target
- Says rate cut will help quicken reduction in unemployment
- Notes that inflation pressures are subdued across the economy
- Sees underlying inflation at 2% in 2020
- But expects inflation to pick up, boosted by petrol prices in Q2
- To adjust policy if needed to support growth, inflation
- Central scenario for Australian economy remains reasonable
- Tentative signs of house prices stabilising in Sydney, Melbourne
- AUD at the lower end of narrow range
The RBA cut its cash rate by 25 bps as expected by most economists and that saw AUD/USD fell to a low of 0.6959 briefly before a surge back up to 0.6985. The fact is that the cuts over the past two months should've been delivered much earlier but now that they are here, traders will be left to ponder: Will the RBA continue to be more dovish from hereon?
The statement itself isn't entirely too dovish but if I want to be nit-picky, the fact that it still points towards spare capacity in the labour market and subdued inflation pressures could mean that further rate cuts are still possible.
But it doesn't look like they'd be too urgent in pursuing them based on the language here despite highlighting risks pertaining to the global economy and US-China trade disputes.
