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RBA leaves the cash rate at 4.75% and takes wait and see approach.

Written by Sam Coxhead on August 2nd, 2011.      0 comments

4:50 PM (NZT) Todays session has been relatively quiet with a few ebbs and flows. The US Congress passed the debt agreement and now it is up to the Senate to approve it for Obama’s signature into law.
The USD has seen some periods of strength, but certainly not a resurgence. In Japan the Bank of Japan continues to pay lip service to intervention, but at this stage they remain on the sidelines.
The Reserve Bank of Australia just released their latest decision on the cash rate. With the backdrop of the stronger than expected inflation number last week, this was always going to be closely watched.
They decided to leave the cash rate unchanged at 4.75% and this has seen the AUD soften since the release. They seem to be taking the wait and see approach given the uncertainty in world markets.
The NZD has seen some appreciation as investors exit sold NZD and bought AUD positions, this has caused the NZD rally against other currencies with the markets being relatively illiquid.
The NZD/AUD has moved higher through previous resistance at .8010 (AUD/NZD support at 1.2485). This may see it move more in the NZD’s favour in the coming sessions.
The full statement can be read here :
On Friday we get to read their quarterly Monetary policy Statement and this will certainly give us a better understanding of their read on the Australian economy and global outlook.
Thusday sees the NZ employment numbers released and again these will be closely watched by the market.
          Past 24 hours
  Current level Pre-RBA  % Chge RBA   Low High
NZD/USD 0.8765 0.8747 0.21%   0.8769 0.8834
AUD/USD 1.0929 1.0978 -0.45%   1.0918 1.1066
NZD/AUD 0.8024 0.7968 0.70%   0.7948 0.8024
AUD/NZD 1.2463 1.2550 -0.70%   1.2463 1.2582
NZD/GBP 0.5373 0.5363 0.19%   0.5344 0.5390
NZD/EUR 0.6150 0.6137 0.21%   0.6088 0.6166
NZD/YEN 67.90 67.75 0.22%   66.87 68.65
NZD/CAD 0.8384 0.8363 0.25%   0.8347 0.8412