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3 Nov 2015
RBA holds fire as AUD rockets – Investec
FXStreet (Delhi) – Research Team at Investec, note that the Australia’s central bank held interest rates at a record low of 2% despite a recent weakening of inflation.
Key Quotes
“The Reserve Bank of Australia saw a rising chance of an economic rebound in coming months, although they kept the door for further rate cuts firmly open depending on changes in the outlook for inflation.”
“A minority of economists had called for a rate cut at the meeting so the Australian Dollar staged a small relief rally after the statement, even as the RBA cited that “the outlook for inflation may afford scope for further easing of policy, should that be appropriate to lend support to demand.” Perhaps the RBA felt they would rather keep their ammo dry and let the Federal Reserve do some currency weakening for them in December if the Fed raise rates - as some have suggested the Bank of Japan may have been thinking when they held rates last week.”
Key Quotes
“The Reserve Bank of Australia saw a rising chance of an economic rebound in coming months, although they kept the door for further rate cuts firmly open depending on changes in the outlook for inflation.”
“A minority of economists had called for a rate cut at the meeting so the Australian Dollar staged a small relief rally after the statement, even as the RBA cited that “the outlook for inflation may afford scope for further easing of policy, should that be appropriate to lend support to demand.” Perhaps the RBA felt they would rather keep their ammo dry and let the Federal Reserve do some currency weakening for them in December if the Fed raise rates - as some have suggested the Bank of Japan may have been thinking when they held rates last week.”