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Aussie Bounces After Initial Decline Caused by RBA Minutes & Economic Data

September 18, 2018 at 17:11 by Vladimir Vyun

A heap of Australian dollarsThe Australian dollar dipped initially today following the release of central bank’s monetary policy minutes and poor macroeconomic data. Yet the currency has bounced by now after markets had calmed, largely ignoring US tariffs on Chinese goods.

The Reserve Bank of Australia released minutes of its September policy meeting today. The notes did not provide any significant new insights. They reiterated that an interest rate hike is more likely than a cut:

Based on the forecasts and associated risks, members assessed that the current stance of monetary policy would continue to support economic growth and allow for further progress to be made in reducing the unemployment rate and returning inflation towards the midpoint of the target. In these circumstances, members continued to agree that the next move in the cash rate would more likely be an increase than a decrease.

Yet they also stated that it will not happen in the near future:

However, since progress on unemployment and inflation was likely to be gradual, they also agreed there was no strong case for a near-term adjustment in monetary policy. Rather, members assessed that it would be appropriate to hold the cash rate steady and for the Bank to be a source of stability and confidence while this progress unfolds.

Meanwhile, the Australian Bureau of Statistics released its House Price Index, which showed an increase by 0.7% in the June quarter from the previous three months. It was the same rate of growth as predicted by analysts and registered in the March quarter.

AUD/USD fell from 0.7176 to 0.7144 intraday but rebounded to 0.7208 as of 17:01 GMT today. EUR/AUD declined from 1.6271 to 1.6176 following the earlier rally to the daily high of 1.6333. AUD/JPY opened at 80.23, fell to the daily minimum of 79.77, but bounced to 80.98 later.

If you have any questions, comments, or opinions regarding the Australian Dollar, feel free to post them using the commentary form below.

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