Currency Analyst since 2010

AUD up as RBA turned neutral

AUD/USD went up and tested levels above $0.8900 after the Reserve Bank of Australia left the interest rate unchanged.

The central bank’s statement was less dovish than the previous one. The RBA dropped the reference to the exchange rate being uncomfortably high, and that looks like a substantial change given that not long ago the members of the regulator suggested lower and lower desirable levels of Aussie.  

According to the RBA, the most prudent course is a period of rate stability, and there are reasonable prospects of global growth picking up this year, though conditions in emerging markets are considerably more challenging than a year ago. MNI says that the RBA has switched to the neutral stance – good for Aussie then.

The central bank will release its latest forecasts on the economy in the quarterly Statement of Monetary Policy due on Friday.

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