Australian Dollar Little Changed Ahead of Data Deluge

 
   


By James Glynn 
 

        SYDNEY--The Australian dollar was little changed Friday, ahead of a massive week of data and comments from the central bank next week.
        The Australian dollar was trading at US$0.7283 at 0710 GMT, down from US$0.7293 late Thursday.
        Australia's central bank will meet Tuesday and is widely expected to keep its cash rate target at a record-low 2.0%, while still pointing to the risk of a further cut.
        Still, some warn that the meeting might not be so benign.
        Recent commentary by RBA Governor Glenn Stevens suggests he is not in a hurry to cut rates again, said Shane Oliver, chief economist at AMP Capital.
        However, he added that the odds are strongly skewed in favor of another cut, "if not Tuesday then in the months ahead, thanks to the bleak outlook for investment, continued sub-par economic growth, the Aussie dollar still being too high."
        The RBA has already cut interest rates twice this year to support the economy in the face of slowing growth and tumbling commodity prices.
        Data earlier Friday highlighted the dilemma for the central bank in contemplating a further rate cut. The RBA has warned that even lower interest rates could overheat the housing market.
        The Housing Industry Australia Affordability Index fell in the second quarter as the positive impact of a second interest rate cut for the year in May was overwhelmed by an increase in median house prices.
        The Index fell by 2.9% to 79.7 over the second quarter from the first. Affordability deteriorated by 3.6% in capital city markets, driven by Sydney and Melbourne.
        -Write to James Glynn at james.glynn@wsj.com
        (END) Dow Jones Newswires
        July 31, 2015 03:24 ET (07:24 GMT)

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