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Aussie higher after hawkish RBA statement

Tuesday, Jun 02 2015
RBA left the cash rate at 2% as it was predicted by traders and economists. “Monetary policy needs to be accommodative” as the economy is likely to operate with spare capacity “for some time yet,” RBA Governor Stevens said in a statement following the decision. Overall, RBA was coy about whether further cuts would be needed to boost growth. 
 
Stevens said in the final paragraph of his statement that the central bank would use data over the period ahead to determine whether its policy was correctly set to boost growth and keep inflation consistent with its target. With very slow growth in labour costs, inflation is forecast to remain consistent with the target over the next one to two years, even with a lower exchange rate. 
 
It was once again repeated that further depreciation in Australian dollar seems both likely and necessary, particularly given the significant declines in key commodity prices, which could push Aussie down long-term looking,
 
After the data Aussie was pushed sharply higher and is currently being traded few points below 0.77 handle. Pair is likely to find support around 0.7650 level and resistance around 0.7750 area. Later today, in the US session, Factory Orders figures will be released.
 
More in this category: « Australian Current Account deficit rose to $10.7 billion Number of unemployed declined both in Germany and Spain »

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