From the Reserve Bank of Australia's Statement on Monetary Policy:

  • Says accommodative policy appropriate, will continue to assess outlook
  • Past fall in AUD to support economy in face of lower terms of trade
  • Reasonable chance AUD to decline further once Federal Reserve raises US rates
  • Trims GDP forecast to reflect slower population growth, seen rising above 3 pct in 2017
  • Year average GDP seen 2-3 pct for 2015/16, 2.5-4 pct for 2016/17
  • Sees underlying inflation 2-3 pct out to end 2017, up from 1.75-2.75 pct on lower AUD
  • Recent data have been generally positive, but economy still faces some headwinds
  • Lowers unemployment forecast, expects little change over next 18 months
  • Still slack in labour market, but a little less than previously expected
  • Subdued wages, slowing population growth may explain steady jobless rate
  • Assumes annual population growth of 1.5 pct, from 1.75 pct previously
  • Outlook for business investment weak, though surveys paint more positive picture
  • Domestic inflationary pressures well contained, lower a$ to lift tradeable prices
  • Home prices rising rapidly in Sydney and Melbourne, but growth weak elsewhere
  • Risks in chinese economy remain somewhat tilted to the downside

Quick headlines via Reuters

Full report here: Statement on Monetary Policy

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AUD higher immediately in the wake of the SoMP and the housing finance data release

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Long story short on this ....

  • The RBA has revised down their growth forecast (Stevens pretty much told us he was gonna do this, and more at my preview),
  • The RBA is more positive on jobs
  • Inflation forecasts upped slightly, but benign

The even shorter story is the dour old RBA is sounding more upbeat (or, at least, less downbeat). It seems the secret sauce to happiness was lowering their expectation for growth ... hmmmm.

Which means monetary policy is appropriate at present. RBA is now on hold for some time to come. AUD higher on the back of it. There are still sellers about on it , though.