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AUD/USD tops 0.77 on positive meeting minutes

The Reserve Bank of Australia cut the interest rate in its latest decision. Nevertheless, the Australian dollar did not take it that badly and is now rising on the minutes from that meeting.

The rate cut was well-telegraphed (as in New Zealand) and  future monetary policy does not look too dovish and this helps the  A$. The currency did not react swiftly but is rather enjoying a gradual advance.

The meeting minutes revealed some positivity. There is room for strong economic growth given  inflation is to remain low for some time. What about the housing bubble? Well, also here, they saw “diminished risks” and even some risk of oversupply in some areas, not exactly bubble worries. Jobs  are expected to remain stable

As usual, they also saw risks to the higher exchange rate, something that could complicate the transition  away from the mining sector. We also got the regular warning from central banks these days about “growing uncertainty” from China an from elsewhere.

Nevertheless, the bottom line is that no rate cuts are on the cards for the near future, and given the weakness of the US dollar, the pair has reasons to rise.

More:  AUD Carry Metrics Not Flashing Red Yet; Caution On NZD – BofA Merrill

 Here is how it looks on the chart:

AUDUSD August 16 2016 rising on RBA minutes

Yohay Elam

Yohay Elam

Yohay Elam: Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I've accumulated. After taking a short course about forex. Like many forex traders, I've earned a significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I've worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts.