February 19, OctaFX – The Australian dollar declined today after the RBA released minutes from a past meeting during which officials sounded caution on the slowing Australian economy.
They also discussed the slowing rate of inflation, which has been caused by increasing competition in the retail sector. Concern was also expressed about the real estate sector, which has seen the value of houses drop sharply. A statement said:
Given that further progress in reducing unemployment and lifting inflation was a reasonable expectation, members agreed that there was not a strong case for a near-term adjustment in monetary policy.
Rather, they assessed that it would be appropriate to hold the cash rate steady and for the Bank to be a source of stability and confidence while further progress unfolds. Members judged that holding the stance of monetary policy unchanged at this meeting would be consistent with sustainable growth in the economy and achieving the inflation target over time.
AUDUSD technical analysis
The AUDUSD pair declined sharply to an intraday low of 0.7100. This was the lowest level since Friday and is along the 21.6% Fibonacci Retracement level.
It is also along the lower band of the Bollinger Bands while the RSI has dropped to 33. With the RBA minutes a bit dovish, there is a likelihood that the pair will continue moving downwards today.
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