[ForexNews]

In its MPS released overnight, the RBA continued to signal that it has moved to a neutral bias from an earlier modest easing bias. RBA still appears to be a while away from hiking rates, however. The RBA's statement suggests that it would need some convincing signs of a strengthening in the global economy before it starts to raise rates. The RBA's macroeconomic forecasts also suggest that it is not in a hurry to increase rates. While its year-to-December 2009 GDP growth forecast was revised up to growth of 0.5% from a contraction of 1% in its May MPS, the RBA's long-term underlying inflation forecasts remain relatively benign. The June and December 2011 forecasts (the RBA targets inflation over an 18- to 24month horizon) were revised up to 2% from 1.5% in the May MPS, which is only at the bottom of the RBA's 2-3% target band. RBA is likely to start taking back some of its easing in Q1 10, and today's MPS increases the confidence in this view.