Australian Dollar Little Changed Just Like the RBA
- RBA Leaves Key Rate Unchanged at 2 percent as Expected
- Australian Dollar little changed versus its US counterpart
- Policy Statement Maintains Neutral, Data-Dependent Tone
The Australian Dollar was little changed versus its US namesake after the Reserve Bank left rates unchanged in July. The markets were pricing in a 37 percent chance of a rate cut. The central bank has now left rates unchanged at record lows for three consecutive meetings.
In addition to leaving rates unchanged, the RBA maintained a neutral monetary policy outlook. In its statement, the bank said the economy has continued to grow over the past year, but at a rate somewhat below its longer-term average. Unemployment has been little changed recently, and the economy is likely to be operating with a degree of spare capacity for some time yet. In such circumstances, the bank judged that monetary policy needs to be accommodative. While this hints that furher rate cuts may be ahead, policymakers stressed that any such decision will be dependent on incoming data, offering no distinct bias for the near term.
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