RBA left the cash rate at the record low 1.5% - BBH

Research Team at BBH, suggests that the Reserve Bank of Australia was the first of four central banks from high income countries that meet this week and it left the cash rate at the record low 1.5%. 

Key Quotes 

“It is Governor Stevens last meeting before his deputy Lowe takes the helm.  Lowe inherits and economy that is still adjusting to the commodity shock and slowing of China.  However, he is not inheriting a pre-commitment on policy. 

Next month's Q3 inflation report is seen as an important for monetary policy in Q4.  The central bank does not appear to be in a hurry to cut rates again this year, but could be forced by circumstances and data.  Tonight, Australia reports Q2 GDP.  Growth is expected at 3.2% y/y vs. 3.1% in Q1.

The Australian dollar is the strongest of the majors, gaining 0.75% against the US dollar.  It has approached a technical target near $0.7655. Recall its recent peak was near $0.7750 on August 10 before sliding to $0.7490 at the end of August.  With today's advance, it has retraced 61.8% of the down draft.  The next target is $0.7700.  Support is seen in the $0.7600-0.7620 area.”