The Australian dollar has appreciated recently, partly reflecting a lower US dollar. The higher exchange rate is expected to contribute to subdued price pressures in the economy. It is also weighing on the outlook for output and employment. An appreciating exchange rate would be expected to result in a slower pick-up in economic activity and inflation than currently forecast. The low level of interest rates is continuing to support the Australian economy. Taking account of the available information, the Board judged that holding the stance of monetary policy unchanged at this meeting would be consistent with sustainable growth in the economy and achieving the inflation target over time.
In the US session ISM Manufacturing PMI data was published. The July PMI® registered 56.3 percent, a decrease of 1.5 percentage points from the June reading of 57.8 percent. Comments from the panel generally reflect expanding business conditions, with new orders, production, employment, backlog and exports all growing in July compared to June, as well as supplier deliveries slowing (improving) and inventories unchanged during the period.
From Australia, tomorrow, Building Approvals figures will be released. Analysts anticipate incline by 1.2%. In the US session ADP job data will be published. Increase by 187,000 is forecasted.
Figures to watch:
Building Approvals (Wednesday 3:30)
ADP Non-Farm Employment Change (Wednesday 14:15)
