Australia’s inflation likely to fall further in 2016

The recent collapse in Oil market put the Commodity currencies in to trouble. In case of Australia, its economic growth is largely dependent on the mining sector with the products to be exported mainly to the East Asian market. Such downfall in oil market is negative for the Australian economy and likely to affect the overall growth forecast for the next couple of years. The Australian dollar also remains very sensitive to moves in oil prices. 

Moreover, falling oil prices may bring inflation lower and loose monetary policy. To avoid such condition, upward growth revision and lower unemployment is likely to announce by RBA's quarterly Statement on Monetary Policy to support inflation. Apart from this the exchange rate assumption is likely to be unchanged in the February. In terms of trade weighted; for the rate against the USD a small 2-cent reduction is likely but which will not put negative effect on growth outlook.