WSJ:Australian Dollar Trades Quietly; RBA Sidelined for Now
By James Glynn
SYDNEY--The Australian dollar traded quietly in Asia on Friday, supported in part by a widening view that a further interest-rate cut locally is still some months away.
Late Friday, the Aussie was trading at US$0.9156, compared with US$0.9168 late Thursday.
The next policy meeting of the Reserve Bank of Australia is scheduled for Sept. 3, just ahead of a Sept. 7 federal election. Economists expect the central bank will stand pat as a result of the vote's proximity.
Attention is fixed instead on November as being the next likely date if the RBA is to add to the eight rate cuts is has made since 2011 to bolster the economy in the face of falling commodity prices.
Paul Brennan, chief economist at Citigroup, said recent better global activity data and an increase in consumer sentiment in Australia will give the RBA time to ponder its next move on rates.
The next likely timing for a rate cute is November, after the release of third-quarter inflation data, Mr. Brennan added.
The RBA will publish the minutes of its Aug. 6 policy meeting next week, when it cut its benchmark cash rate to a record low 2.50% from 2.75%, citing low inflation and weaker economic growth.
Michael Workman, senior economist at the Commonwealth Bank, said the RBA still has the door ajar to cut rates, but it is unlikely to pull the trigger in September.
"But we will be closely monitoring labor market trends and the Australian dollar in assessing the potential for any further policy easing down the line," Mr. Workman said.
"Any further major deterioration in the labor market would shorten the odds for more policy easing," he added.
