The Reserve Bank of Australia sent the AUD lower in today’s sessions after the meeting’s minutes spilled some tea. According to the RBA’s report, it was leaning closer to reduce rates in its November meeting but opted otherwise.
The RBA came closer than what the market initially predicted but eventually settled with a wait-and-move approach.
The Australian money and its futures came tumbling down after the November minutes were released.
Australian dollar contracts went down by 0.16% or 0.0011 points in today’s trading sessions.
Meanwhile, the EUR AUD trading pair climbed 0.17% or 0.0028 points this Tuesday. The pair currently trades for AU$1.6276 and has reached ranges from AU$1.6249 to as high as AU$1.6310.
The news about the Reserve Bank of Australia brought the AUD USD exchange rate down by 0.10% or 0.0007 points. The pair jumped down from its previous close of $0.6808 to %0.6801.
The AUD USD’s fall comes at a good time for the greenback, which recently steadied today after continuously falling.
Considered Cut
The Reserve Bank Australia seriously thought about slashing its interest rate by 0.25% on its last meeting.
If that were the case, the bank’s official interest rate will be lowered to 0.5%. It could also trigger a domino effect for preparations on unconventional monetary policy.
In the end, the bank decided against cutting and considered that it might have an unwanted impact on consumer confidence.
While a lower interest rate would support the economy, the Reserve Bank of Australia contemplated about its effect on savers.
The bank found that it is most fitting to maintain the current levels and assess the effects and situation.
An economist commented that the November meeting’s minutes was a close call for consumers and savers.
He then cited the recent experience and effect done by the past rate cut of the Reserve Bank of New Zealand.
COMMENTS