Australian Dollar Trades Lower After RBA Minutes
17 December 2019 - 1:16PM
RTTF2
The Australian dollar traded lower against its major
counterparts in the Asian session on Tuesday, as minutes from the
Reserve Bank of Australia's recent meeting showed that weak wage
growth is unlikely to revive either inflation or consumption,
opening the door for an interest rate cut in February.
Minutes from the bank's December 3 meeting showed that "the
current rate of wages growth was not consistent with inflation
being sustainably within the target range."
The board also noted that slow wage growth was restricting
"consumption growth returning to trend."
Members agreed that an extended period of low interest rates
would be required in Australia to reach full employment and achieve
the inflation target, it showed.
"The board would continue to monitor developments, including in
the labour market, and was prepared to ease monetary policy further
if needed to support sustainable growth in the economy, full
employment and the achievement of the inflation target over time,"
it added.
The aussie dropped to 0.9035 against the loonie and 75.14
against the yen, from its early highs of 0.9059 and 75.43,
respectively. The next possible support for the aussie is seen
around 0.88 against the loonie and 72.00 against the yen.
Reversing from its previous highs of 1.6182 against the euro,
0.6885 against the greenback and 1.0436 against the kiwi, the
aussie declined to 6-day lows of 1.6238, 0.6861 and 1.0402,
respectively. If the aussie slides further, it may find support
around 1.65 against the euro, 0.67 against the greenback and 1.025
against the kiwi.
Looking ahead, Eurozone trade data for October, U.K. jobless
rate for the three months ended October and claimant count rate for
November are due out in the European session.
In the New York session, Canada manufacturing sales for October,
U.S. housing starts, building permits and industrial production,
all for November, are set for release.
At 12:30 pm ET, Federal Reserve Bank of Boston President Eric
Rosengren will give a speech at the Forecasters Club of New
York.
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