THE Australian dollar was steady in Asian trading yesterday as minutes from the Reserve Bank's meeting earlier this month indicated the December interest rate cut was a closer call than had been thought,possibly delaying further easing next year.
In its minutes,the RBA said it had cut interest rates to counter a quicker than expected slowdown in mining investment in the resources sector,alongside the likelihood of worsening unemployment.
Still,some traders interpreted a comment from the bank that it considered whether to act on the softening labour market conditions now,as a likely peak in resource investment closed in,or wait for further information,as a sign the bank would not cut rates again early next year.
Ray Attrill,global co-chief of foreign exchange strategy at National Australia Bank,said he now felt"even more comfortable"with NAB's forecast that the RBA would wait until May to cut rates again.
"Effectively,the board brought forward a potential rate cut in February to the December meeting,"NAB economists said in a client note."This means a fresh case has to be made for yet another cut in February."
At 5pm AEDT,the dollar was trading at$US1.0534,down just US0.01c on the previous day.
The RBA cut its benchmark lending rate by a quarter of a percentage point to 3 per cent at its December 4 meeting,matching a low reached in the aftermath of the global financial crisis and taking the rate cut tally since November last year to 1.75 percentage points.
Savanth Sebastian,an economist at Commonwealth Securities,said the minutes showed that the pressure for the RBA to cut rates was easing.