During its latest meeting, the Reserve Bank of Australia discussed numerous developments both domestically and abroad as anticipation grows that the Central Bank will be forced to ease monetary policy further during the second half of the year to accommodate the economy. With conditions in many major trading partners deteriorating on the basis of industrial production and commodities demand, the outlook for the nation remains fragile. While the “Brexit” decision was discussed, because the two nations have very limited bilateral trade, the referendum results were expected to have very little impact on forward expectations for the economy. However, weak inflation which remains below the target range combined with mixed employment and housing data are giving way to speculation that another 25 basis points will be slashed from the key rate in the coming months. The Australian dollar fell after the publication, with AUDUSD managing to hold the 0.7500 level.
Australian Policymakers Remain Decidedly Dovish
Daily Analysis - 19/07/2016