RBA stands pat in September, likely to keep on hold for some time

The Reserve Bank of Australia kept its key interest rate on hold on Tuesday, as was widely anticipated. Given the continued appreciation of the Australian dollar, there is much to imply that this would continue to be the case for some time. Since the Reserve Bank of Australia had notably intensified this tone on the Australian dollar in its statement on the rate decision in August, AUD depreciated hardly at all, even if the market so far avoided a renewed test of the 0.80 mark in AUD/USD. The RBA continues to indicate that the strong currency is impeding on the already limited price pressure and is weakening the growth outlook that signifies that even if the second quarter data is positive, market participants should bear in mind that the central bank’s tolerance towards further AUD appreciation is expected to be limited, stated Commerzbank in a research report.

At 22:00 GMT the FxWirePro's Hourly Strength Index of Australian Dollar was neutral at -1.83032, while the FxWirePro's Hourly Strength Index of US Dollar was highly bearish at -111.798. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex

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