- Reserve Bank of Australia
The inflation expectations in Australia fell to 3.1% in July from 3.8% the month prior. In the survey conducted by the Melbourne Institute the respondents, which were expecting the inflation to be in the zero to five percent range, increased for the fifth straight month and were around 83.2% compared to the 77.4%, previously. This was in line with the Reserve Bank of Australia as the central bank had also lowered its inflation forecast for the year to between 1.75 to 2.75 percent from 2.25 to 3.25 percent.
The overall health of the Australian economy is not looking as strong as it did previously. With the mining boom coming to an end and its unemployment rate exceeding that of the US for the first time since 2007 the RBA has also cut its growth forecast by 0.25%, which is now between 2 and 3 percent. The growth for Australia's largest trading partner China is also under risk with worries about its property sector and bad debts as it could weigh on the country's economic prospects. Surprisingly, the Aussie has remained somewhat steady even as the negative economic data and news has come out and still holds a gain of 7.15% this year since its lowest point in January. After the release of report Australia's currency remained steady versus the U.S. Dollar, with the pair hitting 0.9288, the Asian session low. AUD/USD subsequently fell to 0.9230, losing as much as 0.04%.
© Dukascopy Bank SA