RBA Minutes Don’t Speak About Rates Cut, AUD Rises

The Australian dollar strengthened as the minutes of the central bank’s policy meeting showed that the policy makers are content with the current level of the interest rates, reducing probability of a borrowing costs cut. The Reserve Bank of Australia was less dovish than market participants expected, returning appeal of the Australian currency to carry traders, who profit for the relatively high interest rates in Australia compared to the rates in the developed nations. The RBA was moderately optimistic about the country’s economic growth:

Overall, the near-term growth outlook looked somewhat weaker than had been expected earlier, but the medium-term outlook still appeared positive, providing that the world economic outlook did not continue to deteriorate.

The minutes said the central bank’s “members considered that the current setting of monetary policy left the Board well placed to respond to evolving global and domestic economic conditions”. The MSCI World Index of equities gained 1 percent, while the MSCI Asia Pacific Index of shares advanced 0.2 percent. The Aussie, as the Australian currency is often nicknamed, gained on the previous trading session, but weakened somewhat at the start of today’s session. AUD/USD traded at about 1.0261 today as of 2:18 GMT, following the advance from 1.0220 to 1.0274 on the previous trading session. EUR/AUD traded near 1.3364 after it fell yesterday from 1.3386 to 1.3329. AUD/JPY traded at 78.33 after climbing from 78.27 to 78.54 yesterday.