The Reserve Bank of Australia left the interest rate unchanged at 2.25%, the same as it did in March.
While they still left the door open for further moves in the future, the Australian dollar reacted positively and jumped from the lows.
Glenn Stevens and his colleagues weighed in all the arguments and decided not to move. However, they will assess the situation in upcoming meetings and they could decide on action as “further easing may be appropriateâ€.
Regarding growth: it continues to be below trend but on the other hand, lending to businesses has strengthened. The A$ recently fell with commodity prices, and these are mentioned as well.
They still want a weaker AUD, saying that it is needed for the economy and that another fall in AUD “seems likelyâ€.
But, they are still worried about elevated housing prices in Sydney. Growth in lending to housing investors is not picking up and outside Sydney trends seem to be more varied. They are working with other regulators to contain risks. So, will they cut rates once better regulation is in place to contain housing?
Earlier, Australian retail sales came out better than expected with a rise of 0.7% in February, better than 0.4% expected. However, the ANZ Job Advertisements indicator dropped by 1.4%.
More: AUD At Risk Of Limited Lows; – BofA Merrill
At the moment, the markets focus on the present rather than a possibility for future cuts, and the Aussie likes it.
AUD/USD was battling 0.76 before the publication and is how knocking on the doors of 0.77. Also against the kiwi, AUD/NZD escaped parity.
Lines on top are 0.7715 and 0.7750. On the downside we have 0.76 and 0.7560. Here is the chart:
More coming
