RBA holds policy at 3.25% on Melbourne Cup day

FXstreet.com (San Francisco) - The Reserve Bank of Australia kept its policy settings on hold at its November meeting today, leaving the cash rate unchanged at 3.25% and surprising investors who expected a 25 bps cut on Melbourne Cup day.

The statement by RBA Gov. Glenn Stevens says that global risks are largely a result of the situation in Europe, that recent data from China suggests growth has stabilized, that price data is slightly higher than expected, that further effects of rate cuts can be expected over time, that the central bank expects inflation to be consistent with its target within the next 1 to 2 years, and that key commodity prices for Australia remain significantly lower than earlier in the year.

Now that the RBA decision is out, attention is likely to turn to tonight’s A$100mn Australian Lottery draw and the outcome of the U.S. presidential election.