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AUDUSD Hovers Above 0.6400 After Dovish Reserve Bank of Australia(RBA) Minutes

The AUDUSD stayed around the mid-0.6400 level after the release of the Reserve Bank of Australia (RBA) dovish minutes. The exchange rate was at 0.6438, showing a slight increase of 0.0003 or 0.05%. The day’s range for AUDUSD was between 0.6437 and 0.6439.

Trading View

In its September meeting, the Reserve Bank of Australia (RBA) discussed various economic factors and made decisions regarding monetary policy. Here is a summary of the key points discussed:

Inflation and Economic Growth

  • Headline inflation in most economies continued to ease in year-ended terms. This trend was attributed to various factors.
  • Core inflation, which excludes volatile items, remained more persistent than headline inflation in advanced economies.
  • Core services inflation remained high in most advanced economies.
  • In Australia, inflation continued to decline but remained at elevated levels.
  • Economic growth in advanced economies had slowed due to cost-of-living pressures and tighter monetary policy.
  • Growth in household consumption also slowed in the June quarter in many advanced economies.

Labour Market and Wages

  • Labour market conditions had eased gradually but remained tight.
  • Unemployment rates were still low, indicating a strong job market.
  • Wages growth remained solid in the June quarter, reflecting positive trends in the labor market.
  • Rent inflation increased, indicating tight rental market conditions.

Property Market and Exchange Rates

  • Conditions in the property market in China deteriorated further, posing potential risks.
  • Inflation in China remained low compared to global standards and the central bank’s target.
  • Housing prices in Australia continued to increase, reflecting ongoing demand.

Monetary Policy Decisions

  • The RBA considered two options for monetary policy: raising the cash rate target by a further 25 basis points or keeping it steady.
  • Market expectations for the cash rate had declined, with no anticipation of a change at this meeting.
  • The decision to hold the cash rate unchanged was based on the observation that interest rates had already been increased significantly, and the effects of tighter monetary policy were yet to be fully realized.

Looking ahead, the RBA expected headline inflation to continue moderating over the second half of 2023. Core inflation, excluding volatile items and holiday travel and accommodation, had also eased further. Despite some easing in labor market conditions, the overall economic growth in Australia was experiencing a period of subdued growth.

Reserve Bank of Australia

Traders are waiting for FOMC meetings deliberations and BOE rate hikes later this week.

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Author

  • Zahari Rangelov

    Zahari Rangelov is an experienced professional Forex trader and trading mentor with knowledge in technical and fundamental analysis, medium-term trading strategies, risk management and diversification. He has been involved in the foreign exchange markets since 2005, when he opened his first live account in 2007. Currently, Zahari is the Head of Sales & Business Development at TraderFactor's London branch. He provides lectures during webinars and seminars for traders on topics such as; Psychology of market participants’ moods, Investments & speculation with different financial instruments and Automated Expert Advisors & signal providers. Zahari’s success lies in his application of research-backed techniques and practices that have helped him become a successful forex trader, a mentor to many traders, and a respected authority figure within the trading community.

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