AUD response to minutes – pop n drop (plus, updates elsewhere)

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)

Updates:

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  😉

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