RBA Minutes Released and the Australian Dollar near Highs

The Australian dollar (AUD/USD) Forex market saw a short spike higher this morning, after the Reserve Bank of Australia released its minutes of the last monetary policy meeting. This meeting focused on US dollar weakness being behind the Australian dollar’s recent strength.

This could mean that the Australian central bank will be less inclined to do anything about the strength of the AUD. The RBA often states its worries about its effects on the economy.

The Reserve Bank of Australia, this past month, left its official cash rate (OCR) on hold. It is at a record low of 1.50 percent. Their last policy meeting was on September 4. Monetary policy makers said they are concerned about the sustainability of growth. They are also concerned about their citizens’ propensity to get themselves into debt.

These concerns were outlined in their minutes. The RBA sees a need to balance high household debt with stick low consumer prices. Prices do not make the argument for lower interest rates. Household debt, on the other hand, does argue for a higher OCR, if sustained. Australian rate futures markets still say an OCR hike as not in the cards until well into 2018.

The Australian Dollar focuses on the RBA

The RBA stayed with its familiar talking points. The central bank sees gradual pickup in economic growth and solid employment growth. Both of these are backed up by the most recent gross domestic product (GDP) and labor market data. While China’s growth had been stronger than expected, as the central bank made a note of, high debt levels in China are still a worry.

These were the key points within the minutes. There was some fine tuning of certain language. The Forex and financial markets were steady on the release.