The USD/JPY settled at 113.513, down 0.519 or -0.46%.
Despite a mostly sideways trade on
the daily chart, the Australian Dollar still managed to eke out a small weekly gain.
The AUD/USD settled at .7656, up 0.007 or +0.09%.
Early in the week, the Reserve Bank of Australia left its benchmark interest rate unchanged at 1.50%. Later in the week, the RBA slightly downgraded its outlook for economic growth in Australia while signaling only a gradual rise in headline inflation.
In its quarterly statement on monetary policy, the central bank said it sees growth in December 2017 of 2.5 percent easing back from 2 to 3 percent in the previous forecast issued in August.
Additionally, in December 2018, the RBA sees economic growth of 3.25 percent, down from a previously forecast peak of 3.75 percent.
The RBA also forecast the economy growing at “a solid pace” over the next few years due positive labor market developments. However, the RBA is more concerned about inflation and wages growth with the central bank warning that both will rise “only gradually over time”.
Due to the weaker outlook for rising inflation, the Reserve Bank will leave its cash rate on hold at the historic low of 1.5 percent indefinitely.
Oversold technical conditions and a weaker U.S. Dollar underpinned the New Zealand Dollar most of the week.
The NZD/USD settled at .6926, up 0.0020 or +0.28%.
The Reserve Bank left the Official Cash Rate on hold at 1.75%, as widely expected.
Acting Governor Grant Spencer reiterated the same message the RBNZ had been giving all year; the housing market is cooling, inflation is muted and the economy is steadily improving.
“Global economic growth continues to improve, although inflation and wage outcomes remain subdued,” Mr. Spencer’s statement said.
“Annual CPI inflation was 1.9 percent in September although underlying inflation remains subdued. Overall, CPI inflation is projected to remain near the midpoint of the target range and longer-term inflation expectations are well anchored at 2 percent.”
Finally, the RBNZ left its policy statement intact. “Monetary policy will remain accommodative for a considerable period. Numerous uncertainties remain and policy may need to adjust accordingly.”
This article was originally posted on FX Empire
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