The RBA also took yet another chance to worry about the effects of excessive currency strength. The Aussie has slipped in the last couple of months but AUD/USD remains close to its 2017 peak, which is also a two-year high. The minutes warned that a further “material” rise in the Aussie Dollar would mean slower growth and weaker inflation.
Aussie lower after RBA Meeting Minutes
The Australian Dollar came under some pressure Tuesday following the release of minutes from the Reserve Bank of Australia’s last monetary policy meeting. That took place back on October 3, with the record-low 1.50% Official Cash Rate left alone as had been expected. However, the minutes revealed that RBA rate-setters see no “mechanical implications” for Australian rates stemming from tighter monetary policy elsewhere. What this means is that tighter monetary policy in the US or Europe does not have to lead to higher rates in Australia unless local data warrant them.
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