The Australian dollar (AUD/USD) continued to inch higher this morning, despite the release of the Reserve Bank of Australia (RBA) policy meeting minutes. Officials of that central bank are concerned over the strength of their local currency.
The new RBA minutes cover the July 4 monetary policy meeting. The central bank left the official cash rate (OCR) on hold at its 1.50% record low, as expected.
The minutes added little new information for investors to chew on. The RBA remains focused on labor market. There has been improvement, and that was noted. However, the minutes stated “underemployment was still elevated.” Wage pressure was also “subdued.” The housing market is also a concern but the minutes. The minutes said it is too early for the tighter home lending rules to have taken full effect.
RBA Minutes Fuel Australian Dollar Trading
RBA policy makers took another approach at curbing the local currency. They said that a “rising Australian Dollar would complicate economic rebalancing.” However, AUD/USD this morning as the US dollar is under general pressure to selloff. Investors are rethinking the pace of likely US interest rate hikes. This comes after weaker economic data, specifically US inflation. News that the Republican healthcare reform is officially, once again, dead in its tracks, was bad news for the greenback.
Current futures market pricing forecasts show that investors are thinking that there will be no increase in Australian interest rates until the end of 2018.