RBA rate decision review

Reserve bank of Australia (RBA), chose to keep policy rates on hold, in spite of continued weakness in the economy arising from commodity shock and slower import demand from China for Australia's hard commodities such as iron ore and coal.

Very few changes can be observed in current statement, nothing much noting which would suggest RBA stands ready to do much more by easing policy conditions.

• RBA now sees China out of immediate danger and further turmoil. According to RBA, Chinese markets have certainly calm down as heavy swings are now less than prior. However. Governor Stevens knows that Chinese stock market isn't Australia's main headache, slowdown in overall economy is, which is leading to rapid drop in China's commodity appetite.

• RBA now believes, rising house prices, which has been a major concern for RBA and partially prevented it from further rate hike that dwelling prices inflation is now contained in Sydney and Melbourne and RBA now seems calmer over the situation. According to RBA, regulatory measures are helping to contain risks that may arise from the housing market. This statement is starkly different from its prior ones, where RBA described that it is working with regulators to assess and contain risks that might arise from the housing market.

There wasn't anything much other than RBA thinks Australian economy is growing moderate but below longer term average pace and Aussie is adjusting to lower commodity prices.

It can be inferred from todays and last policy statement that RBA may not be too kin anymore to push Aussie down, in spite of lower commodity prices.

With no further signs on policy easing Aussie is enjoying a bullish day so far, trading at 0.711, up 0.4% against Dollar.