HiFX: Foreign Exchange Specialists

• Headlines

July 1, 2008

The RBA conformed to market expectations and left the cash rate unchanged at 7.25% at its July policy meeting.  The RBA mentioned that recent economic data has given ‘additional support’ for their current assessment that demand growth will moderate later this year.  As a result the market has interpreted the accompanying statement as more dovish as it signals a likely neutral stance.  As such the Australian dollar ended the session down nearly 1% against the U.S. dollar as the market now seems convinced that 7.25% should prove to be a peak in the current cash rate cycle.