The RBA signals its discomfort with the rising Australian dollar

Weekly NZDUSD

Debra Rodriguez | 03 August, 2017, 00:55

He said Dr Lowe's statement "effectively says that a stronger Australian dollar amounts to a de facto monetary policy tightening which threatens the RBA's growth forecasts".

He said Dr Lowe's reference to higher commodity prices against the backdrop of expected weaker terms of trade also indicated the RBA was unconvinced a recent bounce in commodity prices was sustainable. It would also cause the progress in economic activity and inflation to be slower than predicted.

'The higher exchange rate is expected to contribute to subdued price pressures in the economy.

The Reserve Bank of Australia has unveiled its decision on interest rates following its monthly board meeting.

Since the start of this year the Australian dollar is up almost 5% against the USA dollar - largely, the RBA noted, a result of weakness in the U.S. currency. Investors in residential property are facing higher interest rates.

"With headline inflation tracking slightly below the 2 to 3 per cent target range, labour markets tightening and the economy continuing to grow, albeit at a pace below trend, the chances of a rate cut appear to have diminished", he said.

But HSBC Australia chief economist Paul Bloxham - who is expecting a cash rate hike early in 2018 - disagreed that the currency's strength would stay the RBA's hand.

There had been speculation in the mainstream media that interest rates would need to rise sooner rather than later, particularly as house prices in Sydney, Melbourne and Canberra posted double-digit growth year-on-year, according to the CoreLogic Hedonic Home Value Index. Some pick-up in non-mining business investment is expected.

In his statement, Dr Lowe said that although retail sales had picked up recently, "slow growth in real wages and high levels of household debt are likely to constrain growth in spending". Growth in housing debt has been outpacing the slow growth in household incomes.

They're expected to show continued solid jobs growth in the U.S. with 180,000 new jobs created in July and a fall in the unemployment rate, coupled with subdued wages growth. In some other markets, prices are declining. A factor working in the other direction is increased competition from new entrants in the retail industry.

RBC capital markets are bullish the Aussie versus the Pound as, "Absent any shift in rate expectations, our default position remains to buy dips in AUD as the outright yield continues to draw in investors while volatility and global yields remain historically low".

The RBA also remained fairly neutral in its outlook for future growth as it said "forecasts for the Australian economy are largely unchanged", which would suggest that the bank's quarterly Statement on Monetary Policy (SoMP) on Friday will not deviate greatly from the RBA previous forecast of 3% annual growth.

GM, Fiat Chrysler July sales plunge as US auto slump persists

India's central bank cuts key lending rate to 6 percent

03 August 2017

GM, Fiat Chrysler July sales plunge as U.S. auto slump persists
Ford also cut fleet sales by 26 percent, and had to stop sales of its Transit commercial van for a few weeks for a recall. Ford's sales excluding heavy trucks declined 7.4 percent, as passenger-car deliveries dropped 19 percent.

02 August 2017

Kathy Griffin Shaves Her Head To Support Sister Fighting Cancer
On Friday, she tweeted that she's "no longer under federal investigation" and that she has been "completely exonerated". Kathy shaved her head to show support for her sister, Joyce , who is battling cancer , the Daily Mail reported.

31 July 2017

US, Overseas Airlines Enhance Foreign Airport Security
As of today, the ban has been removed in full for all ten airports and nine airlines included in the original travel restriction . And Secretary Kelly says terror organizations will continue to try to beat any new security measures that are put in place.
02 August 2017

Philippine police says crackdown targeting more drug lords
During the raid, the police discovered high-powered firearms, explosive devices, huge sums of money and illegal drugs. The deaths came after President Rodrigo Duterte tagged them as politicians involved in the illegal drug trades .

02 August 2017

Danilo Gallinari Injures Hand, to be Ready for Camp
Gallinari's new teammate, Blake Griffin , missed significant time in 2016 when he punched a Clippers' equipment manager. Gallinari plays for Italy's global team and they're now preparing for Eurobasket .

02 August 2017

Stardew Valley announces big update that'll let you marry your friends
Only the main player can decide when to sleep, start and end festivals, and what interactions they would prefer with NPCs. Following the PC release, the patch will then be rolled out to consoles starting with the Nintendo Switch .
02 August 2017

Radeon RX Vega is AMD's return to high-end GPUs
The WX 9100 has 16 GB of 945 MHz HBM2 ECC memory on the same package as the GPU core, providing up to 484 GB/s of bandwidth. Vega will come in a number of different variants including the vega 64 and 56 which will be released later this month.

02 August 2017

Bitcoin Avoided a Fork with One "Awesome" "Positive Change"
But some digital currency exchange operators- including Coinbase and Bitstamp - have said they won't support Bitcoin Cash . Coinbase's decision against supporting the new version, however, means its customers will not receive this benefit.

02 August 2017

Tragic Baby Deaths in 2 Days in Phoenix
One day earlier, on Friday, seven-month-old Zane Endress died after being left alone in a auto on the northeast side of Phoenix. Phoenix fire responded to the area of 28th Street and Broadway Road after receiving reports about an injured child.
03 August 2017

India's central bank cuts key lending rate to 6 percent
As a result, the RBI said it wanted more confidence that inflation would move "close to 4 percent on a durable basis". The Committee was formed during a year ago on the lines of Federal Open Market Committee in the US.

02 August 2017

Germany urges United States to talk to European Union about Russian Federation sanctions
Berlin will use this opportunity to influence the White House decision and hopes that there is still time until U.S. President Donald Trump finally determines how he will strengthen sanctions against Russian Federation .

02 August 2017

Varied Analyst Comments On AK Steel Holding Corporation (AKS), Achaogen, Inc. (AKAO)
Raymond James Financial Services Advisors Inc. raised its position in AK Steel Holding Corporation by 20.9% in the fourth quarter. Following the completion of the purchase, the director now directly owns 21,872 shares in the company, valued at $436,127.68.

Trump Administration Insults All Working People with LGBTQ Actions Earlier this week Donald Trump surprised the military and political world by announcing the transgender ban via Twitter. It's an interesting footnote that on the same date in 1948, President Harry S.

LG V30 will go on sale from September 28 in the US Similar to the V10, a second, supplemental display is located at the top of the device to the right of the front-facing camera. Now, with the LG V30 , according to rumours we can expect a crisper OLED display instead of its traditional LCD displays.

US Slaps Sanctions on Venezuelan President Maduro He said Sunday's vote gave Maduro "less legitimacy, less credibility, less popular support and less ability to govern". Maduro is the fourth head of state sanctioned by the U.S.

Google Voice 5.3 update brings Multi-select messages and more In short it means that there were 5 billion active Android devices at some point of time. It will be showcased under a special section on the " Play Store ".

Congress parades Gujarat MLAs; claims BJP tried to bribe them However, rumours have it that signs of dissent are loud and strong among the 44 MLAs lodged away in Bengaluru . To stop the election of Ahmed Patel, BJP is now banking upon the NOTA provision.

Major League Baseball trade deadline: Yankees acquire pitcher Jaime Garcia And the Yankees are still searching for additional starting pitching, with Oakland's Sonny Gray as their primary target. Castro also added two RBI's. "You're not going to feel 100 percent or be on you're "A" game 100 percent of the time".

At least 6 hurt after van hits crowd in LA A fire department spokesperson says four people have been taken to a hospital and two others were treated at the scene. KTLA-TV reports that a 44-year-old man was rushed by first responders to hospital in a critical condition.

486 suspects on trial in key case of failed Turkish coup Numerous 486 suspects face life terms in prison for crimes that include murder and attempt to assassinate Erdogan. Anyone convicted is expected to get life imprisonment; the death penalty was abolished in Turkey in 2004.

Swimmer Missing Off Smith Point Beach A witness told ABC7: "We called some help, we called the police and said there's still a girl in the water". Monday night. 'Suspending a search is always a hard decision and it's something we don't take lightly'.

Real Madrid's Cristiano Ronaldo appears in court on tax fraud charges Mourinho, now coach of Manchester United, has yet to be summoned for questioning and through his agent has denied any wrongdoing . They have both paid additional fines in exchange for their 21-month jail sentences to be suspended.

Days before Doval's Beijing visit Chinese troops transgress in Uttarkhand The standoff at Doklam was staged by China at the request of Pakistan to divert India's attention to unnecessary matters. ITBP men dressed in civil dress accompany revenue officials who go to this area for official purposes.

The fine print behind Microsoft's new Surface financing plan, Surface Plus Microsoft just announced a new financing option for Surface Laptops, Surface Pro 2017s, Surface Books and Surface Studios. Surface Plus has been launched exclusively for the United States and it will be available starting today.

Dunelm Group (LON:DNLM) Recent Analyst Updates In other Inmarsat Plc news, insider Tony Bates sold 15,155 shares of the stock in a transaction that occurred on Friday, June 9th. The Firm is engaged in managing forests and producing pulp, paper and compound plastics for industrial and consumer packaging.

Wisconsin governor defends $3 bln deal for Foxconn plant Foxconn was exploring investments in seven states including Illinois, Indiana, Michigan, Ohio, Pennsylvania and Texas. Walker said he would convene a special session of the Wisconsin Legislature to address the Foxconn incentive package .

Vikings finalizing 5-year deal with Xavier Rhodes The new contract includes $41 million guaranteed and pays more than $42 million over the first three years , according to ESPN. The Vikings are also discussing contract extensions with defensive tackle Linval Joseph and linebacker Anthony Barr.

The RBA signals its discomfort with the rising Australian dollar

Recommended