RBA latest monetary policy decision
- prior 1.00%
- reasonable to expect extended period of low rates
- RBA will ease further if needed
- Gentle turning point appears to have been reached
- Economy still has spare capacity
- Australian dollar at lower levels of recent times
- inflation pressures subdued and likely to be for some time
- signs of turnaround in established housing markets, but new dwelling activity has weakened
This makes AUD/NZD look interesting again. The RBA cut, but Lowe reiterates the explanation of a 'gentle turning point'. The RBNZ are under pressure after very low business confidence data this week. AUD/NZD longs look attractive again as the banks diverge in their outlook.
