The Reserve Bank of Australia left rates unchanged at its monetary policy board meeting in August ... as was widely expected. But ... it was the comments from Glen Stevens' statement accompanying the decision that was the focus ... especially this:
- The Australian dollar is adjusting to the significant declines in key commodity prices.
That was a big shift in RBA commentary ... they'd be saying previously:
- Further depreciation seems both likely and necessary, particularly given the significant declines in key commodity prices.
More on the August 4 meeting here: Here's the thoughts on the RBA from 10 banks and the views on the next direction for the currency are mixed
The Minutes today will be scoured for more elaboration on RBA thinking on the Australian dollar.
Since the meeting Statement we've had public utterances from the bank. RBA assistant governor Kent was slightly more optimistic on the labour market (his comments are here and here), which suggests a diminished likelihood of further rate cuts and is supportive of the AUD.
We also got the Statement on Monetary Policy (SoMP) released on the Friday immediately after the Board meeting, which is a more detailed look at the economy and policy. In brief, growth forecasts were lowered (as Glen Stevens clearly telegraphed they would be, here) and the outlook for inflation got a slight boost.
RBA monetary policy is now very much on hold.
-
For the AUD today, I'll be back with levels a little later. Initially, resistance 0.7390 through 0.7410, with initial support on the session around 0.7340 then 0.7300/15