Today, the RBA meeting minutes from July 4 revealed a hesitant Board wanting to assess the effects of previous policy moves. Inflation is softening.
It was a quiet start to the day on the Asian economic calendar. There were no economic indicators to move the markets this morning. The lack of economic indicators left the RBA and the RBA meeting minutes from the July 4 meeting to draw interest.
According to the RBA Meeting Minutes,
The RBA surprised the markets for a second month in July by holding interest rates unchanged at 4.10%. Economists had forecast a 25-basis point interest rate hike to 4.25%.
However, the RBA Rate Statement did not close the door on further tightening, placing more weightage on the RBA meeting minutes. Today’s minutes left the door ajar to further tightening. The minutes also suggested the need for more time to assess the effect of the tightening cycle on the economy.
Notably, inflation in other economies softened in June, which could yield a similar trend in Australia.
Ahead of the RBA meeting minutes, the AUD/USD rose to an early high of $0.68219 before falling to a pre-minutes low of $0.68077.
However, in response to the RBA meeting minutes, the Aussie fell from $0.68327 to a post-release low of $0.68109.
This morning, the AUD/USD was down 0.01% to $0.68155.
It is a busy day on the US economic calendar. US retail sales figures for June will draw interest later in the day.
With over 20 years of experience in the finance industry, Bob has been managing regional teams across Europe and Asia and focusing on analytics across both corporate and financial institutions. Currently he is covering developments relating to the financial markets, including currencies, commodities, alternative asset classes, and global equities.