During today meeting, the Board made the decision to maintain the current cash rate target of 4.10%. Following a significant interest rate increase of 4% percentage points since May of the previous year, this pause allows for an assessment of the economic impact of such hikes.
The Board acknowledges that the previously implemented higher interest rates are aiding in establishing a sustainable balance between supply and demand within the economy. Despite inflation rates showing signs of decline, the issue of high inflation remains a concern due to its potential economic disruptions, such as eroding savings value, hindering business planning, and exacerbating income inequality.
Economic growth has slightly slowed, and labour market conditions have eased. Despite this, the unemployment rate remains near a 50-year low, and job vacancies remain high, suggesting a very tight labour market. The Board identifies ongoing high inflation as a risk factor for greater increases in prices and wages, and pledges to closely monitor labour costs and firms’ price-setting behaviours.
AUD/USD trading at 0.6680, up 0.12%, and the pair is reducing its volatility during the formation of a possible symmetrical triangle. Most relevant moving averages are very close to each others, for the next trend movement waiting the breakout of either the lower side or the higher and meanwhile increased possibilities for trading range movements and strategies.
