Forex Flash: RBA minutes show bank believe rate cuts are impacting - Societe Generale

Kit Juckes, Global Head of Currency Strategy at Societe Generale notes that the minutes of the last RBA meeting show a central bank that believes past rate cuts are beginning to have an impact on interest-rate sensitive sectors of the economy, but also believes there is room for further easing if needed.

He comments, “Or, to put it another way, if growth now re-accelerates, they won't cut further.” he feels that the market has one more rate cut priced in this year and the preference would clearly be not to cut rates, and not to have such a strong currency. Juckes writes, “We don't always get what we want but as China re-balances its economy away from investment, and focuses a little more on inflation after giving the economy a boost over the turn of the year, a weaker AUD still looks to be on the cards.”