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20/05/24
160
AUD Flat Ahead of RBA Minutes
On Monday, the Australian dollar was unchanged and traded at about 0.6692 in the European session. There is no economic data out of Australia or the US today, which should mean it will be a quiet day for AUD/USD.
The Australian dollar came off an excellent week in which it gained 1.36% and reached its highest level since Jan. In May so far, AUD/USD has soared 3.4%.
It will be busier on Tuesday as the Reserve Bank of Australia will release the minutes of its policy meeting earlier in the month. There were no surprises at that meeting as the RBA kept the cash rate at 4.35% for the 4th consecutive time.
At the meeting, the RBA discussed the possibility of a rate hike which didn’t happen at the meeting in March. This was likely due to CPI for the first quarter, which was marginally higher than anticipated.
CPI dropped to 3.6% from 4.1%, higher than the 3.5% forecast. Service inflation is still resilient, which means that CPI will likely continue to ease slowly.
RBA policymakers are worried that the route to the 2% inflation target will be rocky and are hesitant to begin cutting rates until they see evidence of price stability being stable.
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