Is RBA waiting on data to justify further rate cut? : Apr 21, 2015

Market Moving News and Views on AUD/USD
21 Apr 2015 01:34GMT

AUD/USD - ...... Despite initial weakness below NY low of 0.7706 to 0.7698 at Asian open, AUD showed muted reaction to RBA minutes.

Reuters reported RBA waiting on data to justify further rate cut. The central bank decided it was prudent to hold off on cutting interest rates in Apr as the Board wanted to see more data, including inflation, to assess the health of the overall economy.

In minutes of the Apr 7 policy meeting, the RBA also said it expected the local dollar to fall further given recent declines in key commodity prices. Such an outcome would help achieve more balanced growth in the economy, the central bank said.

Members also saw advantages in receiving more data, including on inflation, to assess whether or not the economy was on the previously forecast path and allowing more time for the economy to respond to the reduction in the cash rate earlier in the year according to the minutes.

Key inflation figures for the 1st quarter are due on Wednesday and are expected to show price pressures were well contained.

Taking all these factors into account, the Board judged that it was appropriate to hold interest rates steady for the time being, while accepting that further easing of policy may be appropriate over the period ahead.