The June policy meeting by the RBA, saw Governor Lowe cut rates to a record low of 1.25%, a cut of 25bps.
The last movement in the cash rate was August 2016. According to the RBA, the board made the decision “to support employment growth and provide greater confidence that inflation will be consistent with the medium-term target”.
Some of the highlights of the June RBA statement:
- Local Economy – economy to grow by “around 2.75% in 2019 and 2020”
- Supporting evidence includes increased infrastructure investment and an improvement in the resources sector.
- Employment – employment growth has been “strong over the past year” but wage growth remains low with “little further inroads into the spare capacity”
- Housing Market – RBA states conditions “remain soft” but have added “some markets the rate of decline has slowed”
- Further more on housing, growth in housing credit “stabilised recently”.
On the currencies, the AUD has rebounded to 0.7002 USD, after hitting lows recently of 0.686 USD, and the AUD is trading at 0.6217 EUR rebounding from recent lows of 0.615 EUR.