The Australian dollar dropped intraday during the current trading session but has started a rebound at 10:45 GMT and managed to erase its losses against most of its rivals by now, with the notable exception of the US dollar.
The minutes of the March policy meeting released by the Reserve Bank of Australia today provided no surprises. The central bank was optimistic about the domestic economy overall but mentioned several headwinds. Among them was wage growth that had been sluggish despite the improving labor market:
Employment had grown strongly and the unemployment rate had fallen over the preceding year. However, the improvement in overall conditions had not yet translated into a definitive pick-up in wages growth, which remained low.
The RBA also voiced concern about high household debt:
Household debt levels remained high, which contributed to the uncertainty surrounding the outlook for consumption growth.
Additionally, the minutes said:
Financial market pricing continued to imply that the cash rate was expected to remain unchanged during 2018, with a 25 basis point increase expected in the first half of 2019.
Also released during the current session, the House Price Index from the Australian Bureau of Statistics climbed by 1.0% in the December quarter of 2017 from the previous three months after falling 0.2% in the September quarter. Analysts had expected just a token increase by 0.1%.
AUD/USD traded at 0.7705 as of 12:20 GMT today, below the opening level of 0.7714, but above the daily low of 0.7693. EUR/AUD declined from 1.5987 to 1.5943 following the rally to 1.6040 — the highest level since February 2016. AUD/JPY slid from 81.79 to 81.60 before bouncing to 82.10.
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