RBA Maintains Cash Rate at 3.50%, Aussie Increases - 7.8.2012

The Reserve Bank of Australia decided earlier today at its meeting to hold the cash rate at 3.50 per cent stating that “with inflation expected to be consistent with the target and growth close to trend, but with a more subdued international outlook than was the case a few months ago, the stance of monetary policy remained appropriate”. The RBA has been gradually cutting interest rates over the year from 4.75% in October 2011 to 3.50% in June 2012. It therefore decided to maintain them unchanged for a second month in August as the full impact of the earlier monetary easing is not yet seen. The AUDUSD spiked up at the news as traders after the Rate Statement saw that the RBA is not in a hurry to cut interest rates again and that was supportive for the Australian dollar. At the moment the AUDUSD is testing highs at 1.0593.