The Reserve Bank of Australia held its cash rate steady at 1.50%, where it has been since August 2016.
The Australian dollar slipped 0.24% against the U.S. dollar to 1.3109 as of 1:29 a.m. ET.
Financial conditions remain expansionary, despite concerns regarding the direction of international trade policy in the U.S., economic development in certain emerging market economies, and the political developments in the eurozone, specifically in Italy. "Long-term bond yields in most major economies have declined recently and there has been some widening of corporate credit spreads," Governor Philip Lowe noted.
Short-term interest rates in Australia and in a few other countries grew with support from higher interest rates in the U.S.
Recent economic data in Australia has been in line with the central bank's forecast for GDP growth to pick up, to average slightly above 3% in 2018 and 2019. Business conditions are positive and a strong growth in exports is anticipated. The outlook for household consumption remains uncertain as household income has been growing slowly and debt levels are high.
Wages growth remains low, in spite of the improving labor market, and is likely to remain that way for a while, the bank said.
Inflation is expected to remain low for some time, reflecting the low growth in labor costs and strong competition in retailing, though a gradual pickup is anticipated as the economy strengthens. CPI inflation is forecast to be a bit above 2% in 2018.
"The RBA message is essentially unchanged," TD Securities said. "The bank is upbeat on global economic developments and expects wage inflation and unemployment to 'gradually' improve as the economy strengthens."
