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11 Sep 2013
Flash: AUD/USD faces RBA-induced headwinds in upcoming months – NAB
FXstreet.com (Lisbon) - Earlier this month, the RBA left the cash rate on hold at 2.50% at its September meeting, with its accompanying statement suggesting little, if any, change in view since its previous meeting, however inflation is unlikely to be a barrier to further policy easing, notes Alan Oster, Group Chief Economist at NAB.
Key quotes
“While a lower AUD and accommodative monetary policy should provide some relief for trade-exposed sectors and assist a rebalancing of growth towards greater sustainability over time, there will be a need for substantial recapitalisation of those industries that have endured a protracted squeeze from mining investment.”
“As such, with weakness in the domestic demand outlook likely to continue in coming quarters, likely seeing a lower AUD/USD and a modest inflation read in October is expected to pave the way for another 25 bp cut in November, taking the cash rate to 2.25%.”
Key quotes
“While a lower AUD and accommodative monetary policy should provide some relief for trade-exposed sectors and assist a rebalancing of growth towards greater sustainability over time, there will be a need for substantial recapitalisation of those industries that have endured a protracted squeeze from mining investment.”
“As such, with weakness in the domestic demand outlook likely to continue in coming quarters, likely seeing a lower AUD/USD and a modest inflation read in October is expected to pave the way for another 25 bp cut in November, taking the cash rate to 2.25%.”