Yesterday, the Bank of Australia kept interest rates unchanged at 1.5 per cent and lowered inflation expectations, which are expected to be 1.75 per cent by the end of this year, 2 per cent for core inflation in 2020 and around 5 per cent for next year. Previously, inflation was expected to reach 2% this year and 2.5% next year. Contrary to expectations in many markets, the Bank of Australia did not cut interest rates by 25 basis points, while the Australian dollar rose more than 60 points to a record high of 0.7048 since May 1. In fact, the attitude of the Bank of Australia is not as firm as expected, the market is still more divided, support for a rate cut and support for the number of people not to cut interest rates equal. Australian dollar bullish investors should note that the Bank of Australia`s expectations of a rate cut have not been eliminated only temporarily. In addition, the Bank of Australia said Australia`s idle economic capacity still exists in the, real estate market remains weak, and said the global economic outlook is rational, risk bias downside; The good news is that the job market remains strong, with wage growth expected to rise in part and household income rising at a faster pace. The overall policy statement was mild and the Bank of Australia was bullish on future inflation in the face of strong employment and low inflation. Investors should also focus on Sino-US trade talks on whether China can avoid imposing tariffs on it. On a technical level, the Australian dollar steadily responded to most of the day`s gains after hitting 0.7046 yesterday, with 0.6990 still below its support level and 0.7050 at the upper drag level.
