AUD/USD popped a little on the minutes, nt quite getting to 0.8 and since then its com back to under 0.7970
The minutes provide little new insight into RBA thinking – more of the same:
- Growth in employment
- Still slow growth in wages
- Low inflation
- Economic data (for the domestic developments) still leaning positive … “gradual pickup” in one with forecast
- AUD weighing on growth and inflation, RBA not wanting it higher (more on this below)
My interest has been piqued by the RBA comments:
- Rise in A$ driven by fall in US$, weighing on domestic growth and inflation
- Further rise in A$ would result in slower pick-up in growth, inflation
If I reverse those, they don’t want a higher AUD but there isn’t anything they can do about it because its driven by USD weakness. So, RBA is not in a position to do anything about it.
I reckon they are right but I’m surprised they’ve been so blunt. And admitted impotence n the currency.
Back in my day central banks were to be feared, not pitied 😉