ANZ economists on the Australian dollar, a very quick take:

  • The run-up to 0.8000 looks stretched. Continued uncertainty about the USD may hold the AUD up, however

For the Reserve Bank of Australia (next meeting is not too far away, September 5):

  • We see rates on hold at1.5%. Recent datas uggests the risks to the upside are rising.

ANZ add:

We have used statistical techniques to analyse the language in the RBA's post-board meeting statements. From this we have constructed a measure of the RBA's bias - our RBA Bias Index. This index provides a clear signal about the likely change in the cash rate over the coming 6-12 months (Figure 3). It also leads changes in market pricing of the RBA cash rate.

  • The most recent post-meeting statements have taken the RBA Bias Index a little above one.
  • This indicates the RBA's policy bias is starting to lean in a slightly hawkish direction.
  • We don't think the signal is yet strong enough to shift our view from 'on hold', but the evolution of the RBA's language clearly bears watching.