AUD/USD trims gains as RBA SoMP downgrades growth forecast
|- AUD/USD has shed10 pips on RBA's downward revision of GDP forecasts.
- The SoMP talked dovish on wage growth but is reluctant to ease further in the near-term.
- AUD may revisit highs on trade optimism and if China trade data betters estimates.
AUD/USD has backed off from the session high of 0.6906 to 0.6895 in response to the downward revision of the Aussie growth forecast by the Reserve Bank of Australia (RBA).
The Statement of Monetary Policy (SoMP) revised lower the gross domestic product (GDP) forecast for December quarter to 2.25% from 2.50%.
Further, it said the board members stand ready to ease further if needed. The central bank has cut rates three times this year to a record low of 0.75%.
The Aussie economy is 'gradually coming out of a soft patch', wage growth is low and no longer expected to pick up, the SoMP added.
The comments on wage growth are dovish. Even so, the AUD is avoiding big losses, possibly because the RBA is not comfortable easing policy further in the near term due to concerns that it will be interpreted by markets as an overtly negative view on the economy.
That leaves the doors open for the AUD/USD pair to revisit highs above 0.69 on the US-China trade optimism. A White House spokesman told Fox News a few minutes before press time that the White House is very optimistic that a trade deal with China would be reached soon.
China trade data due later Friday could influence the demand for the Aussie Dollar, a proxy for China.
Technical levels
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