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The RBA passed up another opportunity to comment on the exchange rate in today’s policy statement making it the third time in a row, per Westpac Institutional Bank. AUD/USD trades at 0.6442.

Key quotes

“It’s fair to note that the A$ is well above levels prevailing ahead of the announcement of QE on March 19 and slightly above the levels when the RBA cut rates on March 3 too. Thus, the currency is not playing its traditional role of acting as a key mechanism through which monetary policy supports the Australian economy.”

“The move to widen the range of eligibility of corporate debt securities as collateral for domestic market operations did generate some interest and an initial move lower.”

“We see the A$ as being expensive to fair value, that it remains a sell on strength to 0.6550, and it should be closer to 0.62. However, the sense that the RBA is done from a policy perspective and that we are moving towards reopening the Australian economy may support sentiment in the short-term.”