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RBA communiqué barely changed from October - TD Securities

FXStreet (Łódź) - Prashant Newnaha, Asia-Pacific Macro Strategist at TD Securities comments on RBS's monetary policy decision and statement released during the Asian session and bringing almost no changes.

Key quotes

"The RBA Board left the cash rate unchanged at the record low of 2.5%, as it has since the last 25bp cut in August 2013."

"We didn’t get any impression that the market was keenly awaiting this communiqué, knowing that the main event is Friday’s Statement on Monetary Policy (SoMP) and changes to the Bank’s GDP and CPI projections."

"The Board barely tweaked its language, where the 'period of stability' for interest rates remained, while the exchange rate phrase was switched from last month’s 'high by historical standards' back to September’s 'remains above most estimates of its fundamental value'."

"Clearly the Board wants a lower AUD, but has recently lost the ability to jawbone it lower."

"The communiqué was a near-repeat of October, with a few phrases omitted, and a double emphasis that inflation remains between 2-3% and is expected to remain so over the next two years."

"The latter views is to send the signal that the RBA is on hold for some time."

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