15 Apr 2014
RBA slightly more dovish on China and stronger AUD - RBS
FXStreet (Bali) - As Greg Gibbs, FX Strategist at RBS, notes, RBA kept the same line on rates, but with a slightly more dovish tinge on China and stronger AUD.
Key Quotes
The RBA minutes, as expected, kept the same line on rates. It said, "At recent meetings, the Board had judged that it was prudent to leave the cash rate unchanged and members noted that the cash rate could remain at its current level for some time if the economy was to evolve broadly as expected. Developments over the past month had not changed that assessment."
It gave a little more oomph to its assessment on the currency being high. It said, "Members noted that the exchange rate remained high by historical standards. Despite commodity prices falling further over the past month, the exchange rate had appreciated a little further. While the decline in the exchange rate from its highs a year earlier would assist in achieving balanced growth in the economy, this would be less so than previously expected given the rise in the exchange rate over the past few months."
The RBA kept a similar view on conditions. Although it appeared to downgrade its view on China somewhat, noting, "Overall, growth in Australia's major trading partners looked to have remained around average in the early months of 2014, although there were signs that growth in China had eased."
Key Quotes
The RBA minutes, as expected, kept the same line on rates. It said, "At recent meetings, the Board had judged that it was prudent to leave the cash rate unchanged and members noted that the cash rate could remain at its current level for some time if the economy was to evolve broadly as expected. Developments over the past month had not changed that assessment."
It gave a little more oomph to its assessment on the currency being high. It said, "Members noted that the exchange rate remained high by historical standards. Despite commodity prices falling further over the past month, the exchange rate had appreciated a little further. While the decline in the exchange rate from its highs a year earlier would assist in achieving balanced growth in the economy, this would be less so than previously expected given the rise in the exchange rate over the past few months."
The RBA kept a similar view on conditions. Although it appeared to downgrade its view on China somewhat, noting, "Overall, growth in Australia's major trading partners looked to have remained around average in the early months of 2014, although there were signs that growth in China had eased."