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The Reserve Bank of Australia made its first rate decision of 2017 after a break in January. The  RBA left the interest rate unchanged at 1.5% as widely expected. While Phillip Lowe and his colleagues did express some worries about the strength of the  Australian dollar, they  did not really “talk it down”.

AUD/USD holds its ground around 0.7660.

The RBA sounded optimistic about various factors. The global economic conditions are seen as improving, with the Chinese economy growing stronger in the second half of 2016. China is Australia’s No. 1 trading partner.  Higher commodity prices are also favorable to the land down under, helping its terms of trade.

Regarding the job market, they state “mixed” indicators. Growth is likely to return to “reasonable” levels in the fourth quarter. The economy  underwent a rare dip in Q3 2016, but no recession is in sight.

About inflation, the forecasts have remained largely unchanged, and they do expect CPI to top 2% throughout the course of 2017.

AUD/USD and the RBA

The recent rise in the value of the Australian dollar against the greenback led some to believe that the RBA would “jawbone” the A$ down. This isn’t evident in the statement. The line about a strong Aussie is standard fare.

Aussie/USD reacted positively to the news, hitting a session high of 0.7680 before sliding back to the pre-release levels.

More:  AUD/USD: Upside Moves Unlikely To Be Sustained; Narrow Range Ahead – BTMU