The RBA released meeting minutes from the meeting in which they decided to cut the interest rate to 2.25%. Many were eyeing the publication in order to receive indications about the RBA’s next meeting, due in early March.
And, there was no “smoking gun” of another rate cut in March. While this could still happen, the lack of evidence at this moment helped the Aussie’s recovery.
The RBA still sees the Australian dollar above its “fundamental value” and that a lower exchange rate is needed for the economy and assist growth and inflation.
Instant analysis from Australia’s big banks shows a mixed picture: while CBA and ANZ expect a cut, NAB and Westpac cast their doubts. The RBA would like to see a weaker Australian dollar, below 0.75, but will they settle for current levels before acting?
Another factor is the rise in the unemployment rate. The disappointing move to 6.4% implies more action, but a move within two weeks is not necessarily the answer.
Here is how the AUD/USD chart looks like. The pair peeked above 0.78 before ticking marginally below this line.
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