After a couple of quiet weeks the economic calendar ramps up once again this week with plenty of key data releases due out. We also have the monthly Reserve Bank of Australia Board meeting on Tuesday. The market expects the RBA to leave the official cash rate unchanged at 2.50% for the seventh consecutive time at this meeting. While their accompanying rate guidance is likely to remain neutral, the tone in any commentary may be slightly more positive following the recent comments by the RBA Governor last week.
Speaking in Hong Kong last week, RBA Governor Glenn Stevens was clear that he expects the economy to strengthen over the next year, but he had little to say on the Australian Dollar. With the Dollar now above 92 US cents there may be some extra commentary from the RBA on the currency this week, but the bottom line for the interest rate outlook will be the same as last month and consistent with their previous statement that “the most prudent course (for monetary policy) is likely to be a period of stability in interest rates”.