RBA is still holding the door open – Commerzbank

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You-Na Park-Heger, an Analyst at Commerzbank, offers his afterthoughts on the Reserve Bank of Australia (RBA) interest rate decision and its impact on the Australian Dollar (AUD).

“The Reserve Bank of Australia (RBA) today raised its key interest rate by 25 bp to 3.1%, as widely expected. It also signaled that further tightening of monetary policy is likely to be forthcoming. Expectations that the RBA would signal a pause were thus not met. In this respect, the decision was somewhat more hawkish than expected.”

“However, the AUD could not really benefit. This is because the accompanying statement supports the basic assessment on the market that the RBA will soon take a break. Whether this comes a tad later than thought should not make too much of a difference for the currency market. In this respect, Australia’s monetary policy should continue not to offer much support for the AUD.”

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