The Australian dollar was rather stable today, rising against some rivals and falling versus others, but only just a little bit. Fundamentals were somewhat mixed, giving the currency no help in finding direction. Among important events during the current trading session were the policy minutes from the Reserve Bank of Australia and China’s macroeconomic releases.
The RBA released minutes of its latest policy meeting today. In them, the central bank noted sluggish inflation:
The increase in wages growth and inflation was expected to be gradual because spare capacity in the economy was expected to be reduced only slowly.
As a result, the bank signaled yet again that it is not in a rush to start monetary tightening:
As progress in lowering unemployment and having inflation return to the midpoint of the target range was expected to be gradual, members also agreed that there was not a strong case for a near-term adjustment in monetary policy.
With that said, the RBA anticipated that its next move will be a hike, not a cut:
In the current circumstances, members agreed that it was more likely that the next move in the cash rate would be up, rather than down.
The National Bureau of Statistics of China released a range of economic indicators for April today. Retail sales demonstrated a growth by 9.4% from a year ago, disappointing economists, who were counting on a 10.0% increase. Fixed asset investment rose 7.0% in the first four months of 2018, year-on-year, also missing expectations of 7.4%. Industrial production also increased 7.0% in April, year-on-year, but it actually was the only indicator that beat forecasts as the analysts’ average estimate was promising just a 6.4% increase.
AUD/USD was almost flat at 0.7518 as of 9:35 GMT today. AUD/JPY ticked up from 82.50 to 82.61. EUR/AUD rose from 1.5838 to 1.5864.
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