-RBA
Following a move towards 0.94-mark on Thursday, the Aussie moved lower against other major currencies on Friday, as comments from the RBA suggested the economy is not that strong as many expected. Analysts were surprised as the Reserve Bank of Australia revised its inflation forecast on Friday, saying consumer prices will rise 3% in June quarter, lower from the previous estimate of 3.25%. The figure comes after first quarter's inflation at 2.9%, missing market's expectations for a 3.2% gain. The updated forecast means inflation will stay in boundaries of the range, implemented by the RBA, who aims at 2-3%. A slowdown in inflation is a positive result, as Q1 inflation figures cements central bank's pledge to keep interest rates on hold for several months.
Meanwhile, the RBA's growth outlook is not so bright, as even despite the fact forecast for this year remained unrevised at 2.75%, forecast for 2015 was downgraded to 2.75-3.75% from previously expected 3-4%. There two main reasons for a more cautious central bank. First, it is the decline in mining investment, and secondly, weaker-than-expected pick up in activity in the non-mining economy. Upbeat figures from the labour market had little impact on Stevens and his team as well. Perhaps, this is just an attempt to talk down the Aussie, as the easing cycle is over and the RBA now turns to the standard approach of dovish comments.
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