Research Team at Westpac, notes that the RBA acknowledged the higher currency, but put forward 'some increase in commodity prices' and 'monetary policy developments elsewhere in the world' as driving factors. Key Quotes "The Australian dollar has appreciated somewhat recently. In part, this reflects some increase in commodity prices, but monetary developments elsewhere in the world have also played a role". The RBA also noted that "under present circumstances, an appreciating exchange rate could complicate the adjustment under way in the economy". AUD where to from here? The recent appreciation is being seen as more of a factor for consideration, especially if 'an appreciating exchange rate could complicate the adjustment under way'. However, without a shift in the soft easing bias, it's hard to see this as something that would materially change the outlook for the A$ given recently stronger iron ore prices, reduced level of concern about China, signs of Japanese demand for foreign assets and a weak US$ post Yellen's speech. Thus we remain of the view that the A$ is set to remain in a 0.74 to 0.78 near term. However, in the short term, we would not be surprised to see a bit more weakness in the A$, with the potential to test back towards the 0.7500 level.” For more information, read our latest forex news.