RBA Likely to Remain ‘On Hold’ for Now – Westpac
Sean Callow, Strategist at Westpac Global Strategy Group, believes the RBA will not deliver further easing in the next months.
“The RBA held the cash rate at 2.0% in April as expected. The most notable change to the statement from March was a warning that further AUD appreciation could “complicate” the economy’s adjustment to the end of the mining investment boom”.
“The overall view was again summed up as “there were reasonable prospects for continued growth in the economy, with inflation close to target.”
“Westpac expects rates to be kept on hold at 2% through 2016. We do not believe this year’s global turmoil will inflict sufficient damage to Australian domestic demand or the job market to warrant renewed easing, though low inflation keeps the door open for action if the growth outlook deteriorates. Hence it makes sense for markets to continue to price in a chance of easing”.
(Market News Provided by FXstreet)