Today, the Reserve Bank of Australia released the minutes of its September policy meeting. The Australian dollar reacted negatively to the event, sinking after the release.
The comments of the central bank were considered by market participants to be rather dovish. The minutes discussed in detail the recent crash of the Chinese stock market, concluding:
The weakening in Chinese economic activity combined with developments in Chinese financial markets had led to sharp declines in global equity prices.
Nevertheless, the RBA also noted that “several recent policy measures designed to support activity in China had not yet had their full effect.”
Regarding the domestic developments, the central bank of Australia was not particularly optimistic either, saying:
The national accounts were expected to show that output growth had been weak in the June quarter, following a strong outcome in the March quarter partly as a result of temporarily lower resource exports.
The Australian dollar had attempted to rally at the start of today’s trading session but reversed its upward movement early. The decline accelerated after the RBA released its minutes.
Yesterday’s big event in Australia, which perhaps contributed to the Aussie’s rally on Monday, was the change of leadership in Australia’s ruling party.
AUD/USD dropped from 0.7135 to 0.7109 and AUD/JPY dipped from 85.80 to 85.26 as of 13:22 GMT today. EUR/AUD was up from 1.5852 to 1.5896 after falling to 1.5777 earlier.
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