RBA meet next week, today's Australian GDP data will not stand in the way of a rate hike

ING with their thoughts on the implications of the GDP data released today from Australia for the Reserve Bank of Australia policy decision due Tuesday, June 7:

• GDP has not been flagged much by the Reserve Bank of Australia (RBA) in its recent deliberations on monetary policy. And whip-saw GDP data like this will not tell them much about the underlying strength of the economy.
• But for what it is worth, today's GDP data don't sound any undue alarm bells on economic activity and leave the RBA free to concentrate their attention on the tightness of the labour market, wages growth and inflation Inflation Inflation is defined as a quantitative measure of the rate in which the average price level of goods and services in an economy or country increases over a period of time. It is the rise in the general level of prices where a given currency effectively buys less than it did in prior periods.In terms of assessing the strength or currencies, and by extension foreign exchange, inflation or measures of it are extremely influential. Inflation stems from the overall creation of money. This money is m Inflation is defined as a quantitative measure of the rate in which the average price level of goods and services in an economy or country increases over a period of time. It is the rise in the general level of prices where a given currency effectively buys less than it did in prior periods.In terms of assessing the strength or currencies, and by extension foreign exchange, inflation or measures of it are extremely influential. Inflation stems from the overall creation of money. This money is m Read this Term.
• As such, these figures leave the RBA free to hike rates again this month by 25bp, which would take the cash rate target to 0.6%. More will follow in due course and we look for the cash rate target to end the year at 1.6%.

There will be plenty of debate in the week between now and Tuesday about a hike greater than 25bps. ANZ and AMP are at 40bps.

Stay tuned.

AUD AUD The Australian dollar (AUD) is the official currency of Australia, which is also used in Christmas Island, Cocos (Keeling) Islands, Norfolk Island, as well as independent pacific states.Introduced in 1966, the AUD is currently the fifth most traded currency in the world, behind only the US dollar, euro, Japanese yen, and British pound.The currency is very important to forex markets and is routinely used as a carry trade against other majors.The Reserve Bank of Australia (RBA) is the central bank The Australian dollar (AUD) is the official currency of Australia, which is also used in Christmas Island, Cocos (Keeling) Islands, Norfolk Island, as well as independent pacific states.Introduced in 1966, the AUD is currently the fifth most traded currency in the world, behind only the US dollar, euro, Japanese yen, and British pound.The currency is very important to forex markets and is routinely used as a carry trade against other majors.The Reserve Bank of Australia (RBA) is the central bank Read this Term/USD update, a wobble or two but net its gone nowhere today: