RBA's (SOMP): concerned about the strength of the Aussie

In today's Reserve Bank of Australia's quarterly Statement on Monetary Policy (SOMP), where the Bank changed its policy of using forecasting 'ranges' and instead use central forecasts.  AUD/USD has dropped further as the headlines are digested as dovish, notably, the RBA is concerned about the strength of the Aussie. 

Headlines from the SOMP as follows:

RBA: further rise in AUD/USD would slow pick up in economic growth, inflation.

RBA forecasts unemployment rate at 5.5 pct out to June 2019, 5.25 pct by Dec 2019.

RBA: revises up outlook for jobs growth, leading indicators point to solid growth over next 6 months.

RBA: household consumption likely slowed in q3, constrained by slow income growth and high debt.

RBA: outlook for business investment more positive than for some time.

RBA: strength in public investment set to continue, spilling over into private investment.

RBA: housing market has eased nationally, Sydney has slowed noticeably.

RBA: lng exports to add 0.33 ppt to GDP over next two years, less than expected due to delays.

Key notes:

• RBA in no rush to hike rates – UOB
• RBA not following the Fed - Rabobank
• Neutral RBA to sit tight until 2018 - TDS
• AUDUSD: The dailies appear to be turning a little more positive

RBA policy statement:

The RBA Monetary Policy Statement released by the Reserve bank of Australia reviews economic and financial conditions determines the appropriate stance of monetary policy and assesses the risks to its long-run goals of price stability and sustainable economic growth. It is considered as a clear guide to the future RBA interest rate policy. Any changes in this report affect the AUD volatility. If the RBA statement shows a hawkish outlook, that is seen as positive (or bullish) for the AUD, while a dovish outlook is seen as negative (or bearish).