The Reserve Bank of Australia released its monetary policy minutes today, weakening the Australian dollar. The minutes suggested that further monetary easing is possible, while Australia’s economy may grow slower than was previously anticipated.
The RBA released the minutes of its policy meeting on November 6, when it has left the key interest rate unchanged. Yet most analysts expect an interest rate cut on the next meeting and the minutes supported such expectations, saying:
Members considered that further easing may be appropriate in the period ahead.
The central bank lowered its growth forecast for the next year, citing “uncertainty about the timing of spending for mining investment projects”. At the same time, the bank was fairly optimistic about the global economy:
International economic news over the past month was, on balance, more positive than in recent months, though earlier weak data had led forecasters to expect further delay in a pick-up in global activity.
AUD/USD fell from 1.0410 to 1.0386, following the earlier drop to 1.0356, and EUR/AUD rose from 1.2302 to 1.2332 as of 23:13 GMT today. AUD/JPY managed to erase its decline from 84.74 to 84.32, trading at 84.79.
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