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The Australian dollar gained after the Reserve Bank of Australia left its cash rate unchanged today at 2.25% after having cut the benchmark rates to a record low last month.
Governor Glenn Stevens stated that further easing may be appropriate in the future in order to spur demand and achieve the targeted inflation rate as worldwide growth is moderate. Although the U.S. economy is recovering growth in China, Australia's biggest trade partner, is slowing.
The policy board of the RBA will assess the necessity for further easing in the next meetings. Stevens reiterated that the Australian dollar remains" above estimates of its fundamental value" given the slump in commodity prices and that a lower exchange rate is needed to ensure economic growth that is currently "below-trend pace". The Australian dollar has declined versus the greenback although less against other major currencies.
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