No surprises from RBA Minutes as market was already expecting a dovish tone leading to the 2nd Oct 2012 cut.
Key takeaways from RBA Minutes:
- AUD remained historically high
- Full effect of previous rate cuts still working through the economy
- Stable inflation expected for next 2 years – gives scope to cut rates further.
- China’s economy may be “”somewhat weaker” than previously thought
Immediate reaction to the minutes was bearish, with price dropping 20 pips but subsequently rebounded back almost as quickly as it went down. A 2nd attempt was made by the bears to hit 1.0245 support but was also pushed back to pre RBA Minutes levels. 1.0260 was acting as a support/resistance early Asian Session and could similarly be a pivotal point for AUD/USD for the rest of today.
For full RBA Minutes, click here