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

Latest Forex News


Latest Forex News

Editors’ Picks

AUD/USD keeping its head above 21DMA at 0.7673 for now

AUD/USD saw downside during Monday’s Asia Pacific and early European session, dropping momentarily as low as 0.7660. The pair broke below an uptrend linking the 28 December 2020 high with the 4, 11 and 15 January lows.

AUD/USD News

EUR/USD is nearing the 1.2000 psychological threshold

EUR/USD corrective decline continues, with the pair approaching a critical psychological support level. Investors await Biden’s inauguration and ECB’s monetary policy decision.

EUR/USD News

XAU/USD fades recovery moves below $1,850, awaits fresh clues

Gold eases from the top of an immediate $10 trading range while declining to $1,837 at the start of Tuesday’s Asian session. The yellow metal took a U-turn from the lowest since December 01 the previous day as the US dollar stepped back after refreshing the one-month high.

Gold news

Stellar awaits a massive breakout but remains inside a no-trade zone

XLM has continued to trade sideways since we last reported about it. The digital asset remains locked inside a tightening range which will eventually burst. 

Read more

US Dollar Index: Immediately to the upside comes 91.00

DXY extends the march north and already trades at shouting distance from the 91.00 barrier, or new 2021 highs.

US Dollar Index News

Forex MAJORS

Cryptocurrencies

Signatures