RBA play in cool - AmpGFX

In view of analysts at Amplifying Global FX Capital, yesterday’s RBA statement may reflect a degree of cautiousness by the RBA, purposely keeping the wording in the statement little changed, to signal that it is not part of some global shift, and wants to prevent a further appreciation of the AUD for the time being.

Key Quotes

“The RBA statement was very close the one preceding it in June.  This was probably not unexpected, but the market went into the meeting wary that the RBA might join a shift in mood that has occurred in several other major economies’ central banks in the last month, starting with the Bank of Canada.  The fall in the AUD after the statement probably reflects some unwinding of speculative and cautionary long positioning taken just in case the RBA made some less dovish/more hawkish noises.”

“Recent data suggests that the RBA could have sounded more upbeat about the state of the economy and outlook for inflation, but certainly fragilities remain and it would have been unhelpful if the currency had appreciated.”