The Reserve Bank of Australia left interest rates unchanged today. However, in a statement that I suspect will be much debated among analysts, they appear to have introduced a mild easing bias. The crucial sentence says: "Members also observed that the outlook for inflation may afford scope for further easing of policy, should that be appropriate to lend support to demand"

This looks to be a relatvely mild easing bias in the sense that the Board has not said anything in the rest of the statement to suggest that demand has deteriorated recently. In fact the statement notes that businesss surveys suggest a gradual improvement in conditions which has been accompanied by somewhat stronger growth in employment.

However, it is clear that inflation won't stop the RBA cutting if growth starts to weaken

This position will probably be taken as an easing bias by some because it explicitly mentions the possibility of easing. At this stage though the Aussie Dollar is stronger above .72 suggesting the early market reaction is to see the RBA stance as remaining pretty neutral

From a chart point of view, this leaves a low in the Aussie at a potentially key level where cd=ab x 127% and around the 61.8% retracement value as shown on the chart below

AUDUSD CFD Daily Click to Enlarge AUDUSD CFD Daily
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