RBA left interest rates unchanged
Australia’s central bank stood pat on interest rates as it awaits inflation data due later this month to assess its next move. Governor Glenn Stevens left the cash rate at 1.75% on Tuesday, as forecast by every economist surveyed, saying “over the period ahead, further information should allow the board to refine its assessment of the outlook for growth and inflation and to make any adjustment to the stance of policy that may be appropriate.”
The Reserve Bank of Australia acknowledged the risk surrounding the exchange rate, reiterating that “an appreciation of the currency could complicate” the adjustment of the economy from a mining boom. The domestic inflation picture also seems likely to remain subdued as most developed world economies struggle with disinflation. A local private monthly gauge of consumer prices has persistently shown weak readings. “Inflation has been quite low,” Stevens said. “Given very subdued growth in labor costs and very low cost pressures elsewhere in the world, this is expected to remain the case for some time.”
Aussie is currently being traded few points above 0.75 level. Pair is likely to find support around 0.7450 handle and resistance above 0.7550 level.
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