RBA to leave rates steady in next week’s meeting – RBS

FXStreet (Barcelona) – Brian Daingerfield, FX Trading Strategist at RBS, previews the RBA’s rate meeting in the next week, expecting the central bank to keep rates on hold and maintain the preference for a lower AUD.

Key Quotes

“The Reserve Bank of Australia (RBA) holds its July meeting next week and we expect the RBA will leave its benchmark cash rate target steady at 2.0%. While the RBA has maintained that further easing is possible, recent speeches by Governor Stevens and others at the RBA have focused heavily on the transmission mechanism for rate cuts into the real economy, with Stevens noting several times that the transmission of a rate cut may be smaller, and the risks to financial stability greater, with rates already at low levels.”

“We think the RBA will maintain language on the currency that Governor Steven repeated in a speech this week: namely, that a further decline in the AUD is both necessary and likely.”

“Following the RBA’s decision, several important indicators are released including May employment and investment lending and home loans growth for May.”

Brian Daingerfield, FX Trading Strategist at RBS, previews the RBA’s rate meeting in the next week, expecting the central bank to keep rates on hold and maintain the preference for a lower AUD.

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