Reserve Bank of Australia RBA

Australian Monetary Policy Meeting Minutes 19th May 15 – Aussie short opportunities

The $AUDUSD has been acting irrationally for weeks now. We are seeing and unexpected strength in the AUD even after negative numbers. This was being fuelled by the US economy losing momentum and China turning down interest rate.

The RBA has made indication today however that the Australian Dollars Joyride must come to an end.

Here are the critical quotes from the RBA that should set the AUD on a bear run this week:

  • Chinese demand for steel had eased and had been accompanied by a fall in Chinese iron ore production

  • The Federal Open Market Committee (FOMC) had indicated that it was likely to begin the process of normalising interest rates in the second half of the year as long as economic conditions continued to evolve as expected

  • Conditions in the established housing market had remained strong in Sydney and Melbourne. However, across the rest of the country, which accounts for around 60┬áper cent of Australia’s dwelling stock, housing price growth had declined

  • Mining investment was still expected to decline sharply, but the speed of that decline continued to be uncertain

  • Members noted that the delayed pick-up in GDP growth in the revised outlook meant that the unemployment rate was forecast to rise further

  • On the other hand, with the revised staff forecasts scheduled to be released a few days after the meeting, members acknowledged that the challenges of communication might be more effectively met with a reduction in the cash rate at this meeting.

The Australian Dollar is currently floating to high and we opening several short positions around the .80 mark.

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