RBA Meeting Minutes, Aussie Lost Slightly on Increasing Chances of Rate Cut - 18.9.2012

The Reserve Bank of Australia released the September 4th meeting minutes earlier today. The RBA observed that the global growth is softer in Asia, USA still struggles to keep growth pace while euro-area further dips into recession. Additionally it was stated that the major Australian export commodities prices have fallen hurting terms of trade. The members of RBA were concerned about falling prices of the export commodities, the fact that Australian dollar remains strong and global economy is subject to significant downside risks. However the Australian economy was growing according to expectations and inflation expectations are consistent with the target, therefore RBA held the cash rate at 3.50% but stating that would “adjust policy in response to any significant deterioration in the outlook for growth”. The AUDUSD lost some ground as RBA appeared ready to cut the cash rate and fell from 1.0480 to 1.0425.