TWEET TALK: Dollar doubts

Tweet Talk takes the best of Twitter and brings it to you. Today, economists weigh in on what move they think the RBA will make on interest rates.

The Reserve Bank of Australia meets today to discuss the future of the official cash rate. Last month, the central bank held rates steady at 3.5 per cent after cutting them by 25 basis points in June and 50 basis points in May. The consensus among economists is that today will be a hold with further cuts later in the year.

However, some say the persistently high Australian dollar may tempt the RBA board to cut. Here's a collection of their comments on Twitter.

Eureka Report investment strategist Adam Carr (@AdamCarrEcon) said there was no case for a cut:

"With global growth at trend and expected to remain so, no case for a cut. But govt desperate for one as are some industry reps," he said.

"On hold is the best bet, but we know at least 2 or 3 board members want to cut still, so chance remains."

optionsXpress market analyst Ben Le Brun ‏(@benlebrun) says with Europe relatively stable over the past month, a hold is the best bet:

"Holding for now ... Maybe to keep the powder dry, save sum bullets etc ... evidence previous cuts having impact," he said.

"The focus will certainly still be macro. China & Europe. It wont shock to see no more cuts in 2012 ... 1 more I think in Oct.

"Europe no worse than last month. Maybe better with Draghi comments & poss action."

But Market Economics managing director and Business Spectator contributor Stephen Koukoulas ‏(@TheKouk) said the RBA should be cutting:

"Inflation near 40 yr low; housing credit weakest on record; global funk; unemployment rising," he said.

He said if the RBA board didn't cut today, it might have to opt for a larger cut later.

"Protracted recession in Europe hurts China; which in turn hurts Australia: A key reason why RBA should cut," he tweeted.

"Depends what happens tomorrow, but we could see a repeat of mid year and RBA having to 'catch up' with a 50 cut at some stage."

Commsec chief economist Craig James (@craigjamesOZ) also expressed concern over the dollar:

"Can't rule out a rate cut, but on hold for now. High Aussie dollar is a concern though. Scope to cut rates later this yr," he tweeted.

AMP Capital head of investment strategy and chief economist Shane Oliver (@ShaneOliverAMP) said the RBA would be comfortable with where it is at:

"Prob on hold. Stevens seems pretty relaxed & recent data for retail sales, housing etc suggests it will wait & see for now," he wrote.