AUD: No noticeable move post RBA - Westpac

No change in the RBA guidance in the currency was expected given that while the A$ TWI is at lows back to June 2016, it remains within the range seen over the last two years, according to Robert Rennie, Research Analyst at Westpac.

Key Quotes

“Thus no great surprise that the RBA noted for the fourth consecutive month that "on a TWI basis, the Australian dollar remains within the range that it has been in over the past two years. An appreciating exchange rate would be expected to result in a slower pick-up in economic activity and inflation than currently forecast".”

“Arguably, there are some negative undertones for the A$ in that the RBA noted that "the prices of a number of Australia's commodity exports have fallen recently"; "equity market volatility has increased from the very low levels of last year, partly because of concerns about the direction of international trade policy in the United States" and "[some tightening of conditions in US dollar short-term money markets] has flowed through to higher short-term interest rates in a few other countries, including Australia".”

“However, these factors were qualified as being 'within recent ranges' or 'from low levels' suggesting there is nothing to get too excited about, and thus no noticeable move in the A$ as a result.”