RBA leaves cash rate unchanged at 4.35%, as expected

• Prior 4.35%
• Inflation has fallen substantially since its peak in 2022
• Conditions in the labour market eased further over the past month
• But it is tighter than is consistent with sustained full employment and inflation at target
• The economic outlook remains uncertain
• The process of returning inflation to target is unlikely to be smooth
• There are uncertainties regarding the lags in the effect of monetary policy
• Returning inflation to target within a reasonable timeframe remains the highest priority
• Need to be confident that inflation is moving sustainably towards the target range
• Inflation is easing but has been doing so more slowly than previously expected and it remains high
• It will be some time yet before inflation is sustainably in the target range
• RBA is not ruling anything in or out to ensure that inflation returns to target in a reasonable timeframe
• Full statement

At first glance, there’s no significant changes to the language in the statement. The final paragraph and forward guidance language is more or less a copy and paste from the May statement. The most important bits being that the RBA stresses on the need to be vigilant towards upside risks to inflation and that they are not ruling anything in or out at this stage.

AUD/USD is only marginally higher at around 0.6615 now, from around 0.6608 before the decision.

This article was written by Justin Low at www.forexlive.com.