Australia Monetary Policy Meeting Minutes

Release Explanation: Changes in rates affect interest rates in consumer loans, mortgages, and bond rates. Since short term interest rates essentially reflect the return on holding a currency, rate decisions usually affect the exchange rate of the Australian Dollar. Increases in rates or even expectations for increases tend to cause the Australian Dollar to appreciate, while rate decreases cause the currency to depreciate. This is a detailed record of the recent interest rate meeting. This release is very important for traders to discern the RBA's stance on monetary policy and hints of future rate shifts.

Trade Desk Thoughts:

• Policy may need to be tight for the time being.
• A slowdown in demand is unfolding.
• A risk can be seen in waiting too long to cut interest rates.
• It may still be some time before consumers see a fall in the CPI.
• Business conditions have fallen from peak levels to below average.
• Growth in lending to businesses remained weak, while business debt is rising more significantly.
• Members have noted that credit concerns have remained elevated over the past month, especially in U.S. bonds, and the financial conditions of mortgage agencies.

At the conclusion of this meeting and after all factors had been discussed, the Board decided to lower the cash rate 25 basis points to 7.00 percent, which became effective on the 3rd of September.

Forex Technical Reaction: The aussie has fallen by 110 pips since the open of the new day and after the monetary policy meeting minutes were released there was little change as the pair trades just below the S1 LFB pivot point at .7955.

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