Earlier this morning, the Reserve Bank of Australia decided to keep the current policy unchanged, including the Cash Rate which remained at a record low at 1.5% as widely expected.
However, the statement showed a balanced tone, which kept the market uncertain regarding the next decisions, leading to a slight gain in AUD pairs, which remains positive on the day, but eased some of these early gains.
Statement Key Points
Rising Australian dollar could complicate economic transition
Global economic conditions have improved over recent months
Unchanged policy consistent with growth, inflation targets
Labour indicators have been mixed
Higher commodity prices have supported a rise in Australia's national income
Headline inflation expected to pick up over the course of 2017
House prices rising briskly in some markets
US rates expected to rise further, no longer expectations of further easing in other major economies
Australian economy continuing to transition after mining boom
Medium-term risks to China growth remain
RBA Chairman Philip Lowe Remarks
"House prices rising briskly in some markets" - this reiterating the risks already stated - to financial stability and also to household spending
"labour indicators have been mixed" - low wage growth and how this is impacting on spending is a key RBA concern.
Read more: https://www.orbex.com/blog/2017/03/rba-policy-decision-rising-aud-complicate-economic-transition/