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What to expect from the RBA minutes? - RBS

FXStreet (Bali) - Nick Mannion and Paul Robson, FX Trading Strategists at RBS, note that in today's RBA minutes, the market probably expects some dovish tones on the AUD.

Key Quotes

Tuesday sees the release of the Minutes from the November RBA meeting. The policy rate was left on hold at 2.50% as expected and the statement made no change to the assessment of the economy or inflation and maintained the comment that “on present indications, the most prudent course is likely to be a period of stability in interest rates.”

However, RBA was more forceful on the currency, noting “it remains above most estimates of fundamental value” rather than just “high by historical standards”. Governor Stevens is due to speak after the release of the minutes. Comments on macroprudential policies will be closely watched, as well as his thinking on the level of the AUD.

The market probably expects some dovish tones on the currency, so if he skirts the subject it may boost the AUD. More medium-term, we continue to forecast AUD/USD heading towards 0.80 over the year ahead

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