The Australian dollar declined today after the Reserve Bank of Australia released minutes of its latest policy meeting. The release was unlikely the cause of the decline, though, as the central bank retained its neutral stance. The more likely reason for the drop was the risk-off sentiment on markets. By now, the Aussie managed to trim losses.
The RBA released minutes of its November meeting, at which policy makers kept the main interest rate unchanged at 1.5%. The central bank was cautiously optimistic about economic growth, saying:
Members noted that the recent run of economic data suggested that growth in the Australian economy had been higher over the year to the June quarter than earlier forecast, and above estimates of potential growth.
Nevertheless, the Board members did not see a reason for raise interest rates in the near future, though reiterated that the next move will likely be up, not down:
Members continued to agree that the next move in the cash rate was more likely to be an increase than a decrease, but that there was no strong case for a near-term adjustment in monetary policy.
Released yesterday by the International Monetary Fund, the outlook for Australia’s economy was less optimistic, despite saying:
The economyâs strong growth momentum is expected to continue in the near term.
Yet the IMF also stated:
The balance of risks to economic growth is tilted to the downside with a less favorable global risk picture.
AUD/USD declined from the open of 0.7293 to 0.7277 as of 12:04 GMT today but bounced from the daily low of 0.7251. EUR/AUD climbed from the opening level of 1.5696 to the daily high of 1.5771 before retreating to 1.5709 later. AUD/JPY was down from 82.09 to 81.79, and its session minimum was at 81.52.
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