RBA Minutes: Board judged the case for holding rates steady stronger than for hiking
The Minutes of the Reserve Bank of Australia’s (RBA) June monetary policy meeting showed Tuesday that the “board judged the case for holding rates steady stronger than for hiking.”
Additional takeaways
Needed to be vigilant to upside risks to inflation, data suggested upside risk for May CPI.
Economic uncertainty meant it was difficult to rule in or out future changes in policy.
Recent data not sufficient to change outlook for inflation returning to target by 2026.
Judged still possible to bring inflation to target while keeping employment gains.
Board saw downside risks to the labor market, vacancy rates pointed to weakness.
Unemployment rate could rise quickly as it had done in the past.
Continued rapid rise in business insolvencies would be negative for jobs.
Wise to give little weight to upward revisions to household consumption.
Q1 GDP growth had been very weak, wage growth looked to have peaked.
Hike might be needed if board judged policy was not "sufficiently restrictive".
August forecast round would allow staff to carefully judge spare capacity in economy.
Judgements about spare capacity were very uncertain, should be treated with caution.
Inflation expectations still anchored, but market premia had drifted higher.
A material rise in inflation expectations could require significantly higher rates.
Market reaction
AUD/USD trimmed a part of its intraday losses and jumped to retest 0.6650 following the RBA Minutes release. The pair is currently trading 0.17% lower on the day at 0.6647.
Australian Dollar PRICE Today
The table below shows the percentage change of Australian Dollar (AUD) against listed major currencies today. Australian Dollar was the weakest against the US Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.05% | 0.06% | 0.10% | 0.04% | 0.15% | 0.31% | 0.10% | |
| EUR | -0.05% | 0.02% | 0.07% | -0.01% | 0.10% | 0.25% | 0.05% | |
| GBP | -0.06% | -0.02% | 0.04% | -0.02% | 0.06% | 0.24% | 0.02% | |
| JPY | -0.10% | -0.07% | -0.04% | -0.08% | 0.06% | 0.18% | -0.02% | |
| CAD | -0.04% | 0.01% | 0.02% | 0.08% | 0.12% | 0.28% | 0.05% | |
| AUD | -0.15% | -0.10% | -0.06% | -0.06% | -0.12% | 0.16% | -0.06% | |
| NZD | -0.31% | -0.25% | -0.24% | -0.18% | -0.28% | -0.16% | -0.22% | |
| CHF | -0.10% | -0.05% | -0.02% | 0.02% | -0.05% | 0.06% | 0.22% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Australian Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent AUD (base)/USD (quote).
Author
Dhwani Mehta
FXStreet
Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.
