Terms of trade expected to decline but remain at high levels
- Inflation to pick up gradually
- The Australian dollar remains within the range that it has been in over the past two years. An appreciating exchange rate would be expected to result in a slower pick-up in economic activity and inflation than currently forecast.
- Inflation remains low, with both CPI and underlying inflation running a little below 2 per cent. The Bank’s central forecast remains for inflation to pick up gradually as the economy strengthens.Growth in housing debt has been outpacing the slow growth in household income for some time.
AUD little immediate reaction after the Better retail sales rally.Trading around 0.7640, above the 0.7625/30 resistance , matching 27. Nov highs. I expect a buy the 25/30 dips bias for a look up in the 0.7675/7700 zone, the latter should be a tough nut to crack.
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