Australia holds rate, repeats high aud to dent growth countingpips 1 usd in euro


Australia’s central bank kept its benchmark cash rate at 1.50 percent, as widely expected, and repeated last month’s comment that a rise in the exchange rate of the Australian dollar “would be expected to result in a slower pick-up in economic activity and inflation than currently forecast.”

But the Reserve Bank of Australia (RBA), which has maintained its rate since cutting it in August 2016, also said recent economic data was consistent with its expectation the country’s growth would gradually pick up over the coming year.

A steady strengthening of the Australian dollar since May came to a halt in the last month following the RBA’s previous meeting on Aug. 1 when it ratcheted up its warning about the detrimental impact that a stronger currency would have on economic activity and inflation.

In today’s statement RBA Governor Philip Lowe repeated the rise in the Australian dollar, known as the Aussie, partly reflected the decline in the U.S. dollar but this rise would contribute to subdued price pressures and weigh on the outlook for output and employment.

Lowe’s comment about the Aussie today and last month went beyond earlier statements that said a higher exchange rate would “complicate” the adjustment from booming mining investment.

“The decline in mining investment will soon run its course,” Lowe said, adding the outlook for non-mining investment had improved and business conditions are at a high level, with retail sales picking up.

Last month the RBA said the country’s economy is expect to grow at a rate of around 3 percent in coming years. This forecast was not repeated today.

Australia’s Gross Domestic Product grew by 0.3 percent in the first quarter of this year from the fourth quarter of last year for annual growth of 1.7 percent, down from 2.4 percent.

A deceleration in Australia’s inflation rate to 1.9 percent in the second quarter of this year from 2.1 percent in the first quarter reflect a decline in oil prices but inflation still remains higher than the 1.0 percent seen in the second quarter of 2016.

On Aug. 11 Lowe told parliament’s economics committee that he expects to keep interest rates at record lows for a while yet and any tightening is some time away and likely to be gradual to give households time to reduce their debt.

Wage growth remains low in most countries, as does core inflation usd to rupee exchange rate today. Headline inflation rates have declined recently, largely reflecting the earlier decline in oil prices binary to english. In the United States, the Federal Reserve expects to increase interest rates further and there is no longer an expectation of additional monetary easing in other major economies. Financial markets have been functioning effectively and volatility remains low.

The recent data have been consistent with the Bank’s expectation that growth in the Australian economy will gradually pick up over the coming year. The decline in mining investment will soon run its course yahoo futures market. The outlook for non-mining investment has improved recently and reported business conditions are at a high level world market futures live. Residential construction activity remains at a high level, but little further growth is expected. Retail sales have picked up recently, although slow growth in real wages and high levels of household debt are likely to constrain future growth in spending.

Conditions in the housing market continue to vary considerably around the country inr to usd today. Housing prices have been rising briskly in some markets, although there are signs that conditions are easing, especially in Sydney. In some other markets, prices are declining. In the eastern capital cities, a considerable additional supply of apartments is scheduled to come on stream over the next couple of years pre market dow jones futures. Rent increases remain low in most cities. Investors in residential property are facing higher interest rates flower quotes tumblr. There has also been some tightening of credit conditions following supervisory measures to address the risks associated with high and rising levels of household indebtedness fraction calculator online free. Growth in housing debt has been outpacing the slow growth in household incomes.

The low level of interest rates is continuing to support the Australian economy. Taking account of the available information, the Board judged that holding the stance of monetary policy unchanged at this meeting would be consistent with sustainable growth in the economy and achieving the inflation target over time.”

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