RBA Minutes: Fall in the AUD good for economy, no strong case for near term rate move


The minutes of the Reserve Bank of Australia Oct. 2 meeting released a couple of minutes ago showed the policymakers expect the weak Australian dollar to buttress domestic economic growth.

The minutes reiterated that the next move in interest rates is more likely to be on the higher side, although policymakers do not see a near-term rate move.

Key points

  • Agreed holding rates steady a source of stability and confidence
  • Next move in rates more likely to be up, no strong case for a near-term move
  • Recent modest fall in AUD helpful for domestic economic growth
  • Findings of the Royal Commission could lead banks to further tighten lending standards
  • Important to measure the supply of credit so that economy continued to be supported
  • RBA noted a modest increase in banks' funding costs, mortgage rates still low after recent rises
  • Home prices had fallen noticeably in Sydney and Melbourne, following previous strong gains
  • Uncertain on consumption given subdued income growth, falling home prices
  • Data point to solid GDP growth in Q3, though likely to moderate from the pace of the first half
  • Noted employment rose strongly in August, spare capacity had declined
  • Average earnings still weak, subdued unit labor costs putting downward pressure on inflation
  • Drought likely to reduce farm output, crop yields over 2018/19
  • Global growth is seen solid next couple of years, despite recent softening in data
  • Sino-US tariffs a significant risk to the global outlook

 

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.

Feed news

Stop losing your money! 
Learn to trade with us!

24/7 signals + Webinars    

Latest Forex News


Latest Forex News

Editors’ Picks

EUR/USD eases below 1.1900 as USD rises with yields, US CPI eyed

EUR/USD is trading under pressure below 1.1900, as the US dollar rebounds in tandem with the Treasury yields amid rising inflation expectations. Europe's covid concerns continue to undermine the euro. German ZEW and US CPI awaited. 

EUR/USD News

GBP/USD extends fall after UK GDP misses estiamtes

GBP/USD is trading below 1.3750 after UK GDP figures for February missed with 0.4% and despite Britain's successful vaccination campaign. The currency pair has been under pressure as the dollar strengthens across the board alongside yields. US inflation is eyed.

GBP/USD News

Gold defends 21-DMA support amid USD rebound, US CPI eyed

Gold sees some signs of life amid weaker Treasury yields. The yellow metal fell nearly $11 on Monday, extending its two days of declines, as the Treasury yields reversed course and edged slightly higher following a good three-year note auction.

Gold News

Bitcoin a “caged bull” with little resistance ahead as BTC still in price discovery mode

Bitcoin price continues to struggle to reach a record high above $60,000. However, BTC demand and on-chain data suggest a bullish outlook for the pioneer cryptocurrency. Bloomberg analyst Mike McGlone indicates Bitcoin is in price discovery, far from reaching the cycle top.

Read more

Weekly outlook: Inflation in the spotlight

Inflation and inflation expectations are likely to be in the spotlight in the coming week. We saw a decline in US inflation expectations this week and with that, a decline in bond yields that pressured the dollar.

Read more

Forex MAJORS

Cryptocurrencies

Signatures