The minutes of the Reserve Bank of Australia are being drip-fed through the wires adding more colour surrounding the Board’s views and are so far supporting AUD/USD that was already correcting an hourly bearish impulse.
Inflation had picked up, and a further increase was expected.
Australian economy had remained resilient, and spending was picking up following the setback caused by the outbreak of the omicron variant.
Measures of underlying inflation in the March quarter are expected to be above 3%.
Wages growth had also picked up but, in aggregate terms, had been below rates likely to be consistent with inflation being sustainably at the target.
The strength of the Australian economy was evident in the labour market
These developments have brought forward the likely timing of the first increase in interest rates.
Over the coming months, additional evidence will be available on both inflation and the evolution of labour costs.
Members noted that higher prices for petrol and other commodities would further lift inflation over coming quarters.
Members agreed that financial conditions in Australia remained highly accommodative.
About the RBA minutes
The minutes of the Reserve Bank of Australia meetings are published two weeks after the interest rate decision. The minutes give a complete account of the policy discussion, including differences of view. They also record the votes of the individual members of the Committee. Generally speaking, if the RBA is hawkish about the inflationary outlook for the economy, then the markets see a higher possibility of a rate increase, and that is positive for the AUD.
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