Australian Dollar Mute on Dovish RBA Board Minutes
THE TAKEAWAY: RBA Board Minutes Lack Enthusiasm for Economic Growth > Dovish Outlook Affirms Chance of Expected Rate Cut > AUDUSD Falls
Monetary policy meeting minutes released by the Reserve Bank of Australia portray a Board markedly reserved in regard to Australia’s economic outlook. With regard to international conditions, governors noted “ongoing weakness in Europe,” a slowing Chinese growth, falling terms of trade, and concerns that higher oil prices will negatively affect supply. Domestically, board members emphasized mixed business activity indicators, modest export growth, a subdued labor market, and a weak housing market. Overall, the Board stated that, in the event of moderating inflation during the coming period, “then a case could be made for further easing of monetary policy.” However, the RBA will wait for the Aussie CPI data’s release on April 24th before making a decision regarding its cash rate.
Following the release, which was widely expected to be dovish in tone, traders initially sold, then repurchased the Aussie dollar. The AUDUSD fell from 1.0340 to as low as 1.0330, and then rose up to 1.0350.
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