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RBA leaves rates unchanged as expected

Written by Sam Coxhead on May 3rd, 2011.      0 comments

5:00 PM (NZT) The RBA left the cash rate at 4.75% as expected and said the current policy remains appropriate. Acknowledged that the longer term inflation is expected to rise but the high level of the AUD will help contain it. Expects CPI to remain close to target over the next year and this has caused the AUD to soften a touch, although this softness is looking like it is being happily bought into by the market at this stage.
The announcement has also seen some exiting of bought AUD vs sold NZD positions and this exiting has given the NZD a small boost across the board as can be seen below
This is not as hawkish on interest rates as some of the market were expecting. A couple of well followed economic commentators in Australia have recently been tipping that the RBA could move as early as August, but this looks a long shot now.

          Last 24 hours trade
  Current level Pre-RBA Chge since RBA   Low High
NZD/USD 0.8051 0.8031 0.2%   0.8013 0.8120
AUD/USD 1.0912 1.0919 -0.1%   1.0889 1.1012
NZD/AUD 0.7378 0.7355 0.3%   0.7345 0.7385
AUD/NZD 1.3553 1.3596 -0.3%   1.3541 1.3615
NZD/GBP 0.4842 0.4830 0.2%   0.4822 0.4858
NZD/EUR 0.5434 0.5427 0.1%   0.5415 0.5450
NZD/JPY 65.17 65.07 0.2%   64.96 65.88
NZD/CAD 0.7628 0.7603 0.3%   0.7588 0.7701