The Aussie Dollar Is On The Slide Again After The RBA Minutes


Via, what’s happened to the Australian dollar after the Reserve Bank released the minutes of its monthly meeting today. At time of writing it stabilised around $US0.952.

The slide was on from around 11am AEST before a sharp drop just after 11.30am. Here’s the key observation from the minutes:

The exchange rate had also depreciated noticeably, though it remained at a high level considering the decline in export prices that had taken place over the past year and a half. It was possible that the exchange rate would depreciate further over time as the terms of trade declined, which would help to foster a rebalancing of growth in the economy.

A weaker dollar should help the non-mining sector of the economy as exports become more competitive. But the board noted that business conditions in the non-mining sector remained subdued.

In short, and in line with analysts’ expectations, the RBA sees options for further cuts to interest rates over the coming months if growth remains sluggish.

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