A preview of what to watch for in today's Reserve Bank of Australia decision and Governor Stevens' accompanying statement
This is via Sean callow, FX Strategist at Westpac:
- There is no tension over the RBA's decision on the cash rate, keeping it at 2%
On the Statement:
- Judging by Governor Stevens' speech last week, there will be no downgrading of November's optimism: "the prospects for an improvement in economic conditions had firmed a little over recent months."
- We will however keep an eye on the AUD commentary. In August the RBA dropped its reference to further AUD depreciation being "both likely and necessary", switching to the neutral view that AUD "is adjusting to the significant declines in key commodity prices." Given further decline in these prices over the past month, last week's 3 month high in AUD TWI could be enough for a tweak of this language, which should prompt some AUD selling, albeit probably not dramatic, given the rest of the statement.
Boldings in the above are mine
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Similar thoughts from my preview, here, and Greg's report on ANZ's expectations earlier
