The Reserve Bank of Australia confirmed in its August Meeting Minutes that it is not expecting to raise its Official Cash Rate, given at 1.50% since 8 February 2016. The RBA sees improvement in unemployment, income growth and inflation. Inflation and unemployment forecasts are estimated at 2.25% (2018: 1.75%) and 5% by 2020. Current monetary policy should continue to support growth. However, recent drought conditions affecting crop harvests is a serious factor to monitor, as farm output and export forecasts are reduced. Additionally, uncertainties surrounding US trade policies remain a serious impediment. The Aussie was little changed. Currently at 0.7358 USD, the AUD/USD pair is expected to strengthen, heading along 0.7370 in the short-term.
By Vincent Mivelaz
