The Reserve Bank of Australia left the rates and key elements of its statement unchanged as expected.
This allowed AUD/USD to recapture the highs just under 0.88. Is it heading for the next resistance line?
RBA decision
The cash rate remains at 2.50% once again and the Bank reiterated that a period of stability is “prudentâ€. Inflation is expected to be consistent with target. Regarding the Aussie dollar, the RBA repeated its stance that the currency “remains high by historical standards†despite the fall in September.
RBA Governor Glenn Stevens and his colleagues have a dilemma: the economy is slowing but the housing sector is booming. Concerning the latter, Stevens and co. say that “dwelling prices have continued to rise over recent monthsâ€. but this is merely an observation: no hint of rate hikes nor other tools to curb the rise in Australian home prices.
Regarding the job market in general, the central bank notes that recent jobs data has been volatile and that’s clear given the leap of 121K reported recently. However, it will take some time before unemployment falls consistently.
All in all, Stevens and co. painted a balanced picture and left the monetary policy guidance unchanged.
AUD/USD action
A$/USD recovered nicely from Friday’s NFP triggered lows (the lowest since 2010) thanks to a general sell-off of the US dollar as the new week began. No specific headline triggered the weakness of the American currency.
The Aussie towards the announcement, but as no changes were seen, AUD/USD continues advancing, reaching 0.8780 at the time of writing. The next level of resistance is 0.8820. Support is found at 0.8765.
The Aussie tops the list of 5 most predictable currencies for this quarter.
For more, see the Australian dollar forecast.
