RBA monetary policy statement: GDP cut on subdued investment, inflation outlook

The RBA monetary policy statement has just been released, with the central bank cutting the growth outlook as well as the inflation outlook on subdued investment and high Australian Dollar. The new forecast for 2013 is at 2.5% vs 2.75%; The December 2013 GDP projection stands now at 2-3% vs a previous 2.25%-3.25% range.

RBA adds: "More signs of Chinese GDP stabilizing, a boost for commodities. Terms of trade should rise in 2013 thanks to Iron ore, but ease gradually thereafter. Outlook for non-mining investment remains uncertain. Sees inflation close to mid-target range for coming year. Sees only modest jobs growth & unemployment edging up in 2013."

The statement is not overly dovish, yet immediate reaction of the Australian Dollar was to sell-off to new year lows at 1.0260.