AUD: Lack of RBA Easing Bias Lifts the Aussie - MUFG
Lee Hardman, Currency Analyst at MUFG, notes that the Australian dollar has been one of the top performing currencies in the Asian trading session as it continues to benefit in part from dampened Fed rate hike expectations.
“The Australian dollar has derived support as well overnight from the release of the RBA’s latest policy statement which did not include a more explicit signal that the RBA is likely to more seriously consider lowering rates further at their next meeting on the 5th July. The RBA merely stated it judged that “holding the stance of policy unchanged at today’s meeting would be consistent with sustainable growth in the economy and inflation returning to target over time”. In contrast, the RBA stated in their April monetary policy statement in advance of the last rate cut that “continued low inflation would provide scope for easier policy, should that be appropriate to lend support to demand”.
The RBA also upgraded its description of the economy stating that “other areas of domestic demand, as well as exports, have been expanding at a pace at or above trend”. Overall the comments will help to ease some of the downward pressure on the Australian dollar in the near-term. Persistently low inflation could still prompt the RBA to ease policy later this year.”