RBA Minutes Highlight Global Weakening, AUDUSD Little Changed
THE TAKAEWAY: RBA released minutes to September 4 policy meeting > Global growth appears somewhat mixed, Australian economy still subject to European weakness > AUDUSD unchanged
The Australian Dollar traded higher versus the U.S. Dollar after the Reserve Bank of Australia released their minutes from the monetary policy meeting which took place on September 4. The RBA highlighted a slight weakening in the global outlook and softer economic activity in China while the rest of Asia and the US appeared to have expanded at a moderate pace. Furthermore, the Central Bank noted that economic conditions in Europe remained weak.
Despite that fact that iron ore prices had declined sharply, members of the board noted that record levels of iron ore production were achieved by Australia’s largest producers and is expected to continue over the next twelve months. Moreover, the minutes point out that business credit had picked up throughout the year and was growing at its fastest rate in three years.
The report also discussed the Australian labor market had weakened in July according to leading indicators yet wage growth had picked-up during Q3.
Other noteables include the Australian banking system was well placed to serve their domestic market and appeared less vulnerable to financial shock while corporations remained profitable however, business borrowing remained below historical averages.
The Eurozone slowdown still appears to pose the biggest risk to the Australian economy as exports of iron ore to China have been on the decline due to flagging European demand for Chinese steel.
AUD/USD, 5 Minute Chart
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