Highlights from the RBA statement

  • RBA leaves the cash rate unchanged at 2.25 per cent
  • RBA: Moderate growth in global econ expected in 2015
  • RBA: Much lower levels of energy will act to strengthen global output and temporarily lower CPI rates
  • RBA: Prices for key Australian exports have been falling, terms of trade continuing to decline
  • RBA: Data suggests growth is continuing at below-trend pace, domestic demand growth weak as business capex falls
  • RBA: Economy likely to be operating with degree of spare capacity for some time yet
  • RBA: Inflation likely to remain consistent with target over next one to two years
  • RBA: Australian Dollar has declined noticeably against USD, though less against a basket of currencies
  • RBA: Further AUD depreciation likely, particularly given the significant declines in commodity prices
  • RBA: Lower exchange rate needed to achieve balanced growth in economy
  • RBA: Further easing of policy may be appropriate over period ahead, in order to foster sustainable growth in demand and inflation consistent with target

The RBA has made it clear that further rate cuts are possible in the near-future, but the statement isn’t very dovish and we are likely to see further AUD position covering in the upcoming trading session. AUD/USD is currently at 0.7670.

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