The Australian dollar was rising at the start of the current trading session and continued to move higher for a short while after the release of policy minutes by the Reserve Bank of Australia. The currency slumped shortly afterwards, only to resume its rally later. Yet by now, the Aussie has come off the day’s highs, trimming its gains versus some currencies and losing them outright against the US dollar.
As was expected, the RBA maintained its neutral stance in the minutes of its latest policy meeting. The central bank was cautiously optimistic about the Australian economy thanks to accommodative monetary policy:
Over 2017, progress had been made in reducing the unemployment rate and bringing inflation closer to target. The low level of interest rates was continuing to play a role in achieving this outcome. Further progress on these goals was expected over the period ahead but the increase in inflation was likely to occur only gradually as the economy strengthened.
With that said, the bank warned that appreciating currency may hurt economic growth:
Members observed that an appreciating exchange rate would be expected to result in a slower pick-up in economic activity and inflation than forecast.
AUD/USD declined from 0.7910 to 0.7884 as of 13:23 GMT today after touching the high of 0.7933 intraday. AUD/JPY was up from 84.32 to 84.49 but retreated from the session maximum of 84.90.
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