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RBA leaves the cash rate unchanged.

Written by Sam Coxhead on September 4th, 2012.      0 comments

5PM (NZT) The RBA just announced they have left the cash rate unchanged at 3.50%, as was largely expected.
 
In the accompanying statement they acknowledged the softness evident in commodity markets with the slowdown in Asia (China) being mostly driven by lower export demand from Europe.
 
The final paragraph summed up the sentiment well ;
 
At today's meeting, the Board judged that, with inflation expected to be consistent with the target and growth close to trend, but with a more subdued international outlook than was the case a few months ago, the stance of monetary policy remained appropriate”
 
With resources capital investment and earnings having dropped quickly over the last month or so, expect the easing bias to increase unless we see a change in the Asian driven commodity markets. No focus moves to GDP tomorrow and employment numbers on Thursday. Interestingly the world’s 4th largest iron-ore producer Fortescue slashed capital spending by 1.6 billion  and revised its expansion schedule for iron ore production because of the softening markets driven by weak demand from China.
 
The AUD has taken back a little of its lost ground following the number as some participants obviously thought there was a chance the RBA were convinced to move following the recent change in sentiment in the economy.
 
          Past 24 hours
  Current level Pre-RBA  % Chge since RBA   Low High
NZD/USD 0.7976 0.7975 0.01%   0.7959 0.8016
AUD/USD 1.0253 1.0235 0.18%   1.0227 1.0275
NZD/AUD 0.7780 0.7792 -0.15%   0.7775 0.7804
AUD/NZD 1.2853 1.2834 0.15%   1.2814 1.2862
NZD/GBP 0.5020 0.5018 0.04%   0.5011 0.5051
NZD/EUR 0.6324 0.6321 0.05%   0.6321 0.6373
NZD/YEN 62.51 62.50 0.02%   62.36 62.77
NZD/CAD 0.7863 0.7861 0.03%   0.7851 0.7901
Topics: RBA
 

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