4 Feb 2014
Flash: AUD strengthens following RBA rate hold - BTMU
FXStreet (Barcelona) - Lee Hardman, FX Analyst at the Bank of Tokyo Mitsubishi UFJ notes that the Australian dollar has strengthened following last night’s RBA monetary policy meeting at which it signalled that it has dropped its explicit easing bias and shifted to a neutral bias.
Key Quotes
“The RBA now judges that policy is “appropriately configured” and “on present indications, the most prudent course is likely to be a period of stability in interest rates”."
"The RBA also no longer described the Australian dollar as “uncomfortably high” instead noting that it has “declined further, which, if sustained, will assist in achieving balanced growth in the economy". It fits with our view that the bulk of the adjustment for the Australian dollar in the near-term has now been completed.”
“Again a sharper than expected economic slowdown in China remains the main downside risk for the Australian dollar and could still prompt further RBA easing although even in our base case scenario we do not envisage the RBA raising rates until at least late in 2015."
Key Quotes
“The RBA now judges that policy is “appropriately configured” and “on present indications, the most prudent course is likely to be a period of stability in interest rates”."
"The RBA also no longer described the Australian dollar as “uncomfortably high” instead noting that it has “declined further, which, if sustained, will assist in achieving balanced growth in the economy". It fits with our view that the bulk of the adjustment for the Australian dollar in the near-term has now been completed.”
“Again a sharper than expected economic slowdown in China remains the main downside risk for the Australian dollar and could still prompt further RBA easing although even in our base case scenario we do not envisage the RBA raising rates until at least late in 2015."