The Australian dollar was mixed today after the Reserve Bank released minutes of its August policy meeting, which did not provide many new insights into the central bank’s plans.
The RBA released today minutes of the meeting that happened two weeks ago. Among interesting details in the notes analysts pointed out the mention of the El Nino event:
Members noted that the probability of an El NiÃ±o event, which would typically be associated with low rainfall in eastern Australia, had increased over 2018, implying downside risks to the forecasts for farm output and exports.
Otherwise, there was little new information, and the bank reiterated:
Members continued to agree that the next move in the cash rate would more likely be an increase than a decrease.
RBA Governor Philip Lowe echoed such view in his today’s remarks at the breakfast event to launch ASIC’s National Financial Capability Strategy 2018. He stated:
If we continue on this current improving track, as we expect we will, it is likely that the next move in official interest rates will be up, not down.
As a result, he advised borrowers to be prepared for such eventuality:
My advice here is to make sure your finances can withstand a lift in interest rates.
AUD/USD traded at 0.7345 as of 12:39 GMT today after opening at 0.7335 and rising to the daily high of 0.7365. EUR/AUD was at about 1.5655 following the rally from 1.5629 to 1.5699. AUD/JPY gained from 80.75 to 81.08.
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