The RBA left rates at a record low of 1.50% for the 10th month.
ABC Bullion chief economist Jordan Eliseo said the RBA would wait to see further evidence of the property market cooling down before cutting rates in the second half of the year. Projections for tomorrow's first quarter GDP report are for a 0.2% quarter-on-quarter growth.
Dr Lowe said sluggish wage growth is dampening household consumption, and decent growth in real wages would not happen for some time. Employment growth has been stronger over recent months, although growth in total hours worked remains weak. However, there is nothing in the statement corroborating the market's slightly dovish lean as there is around 6bp of cuts price in through to Dec (most dovish pricing this year) so the Aussie could find support.
The Australian dollar rose, buying 74.90 USA cents at 2:58pm in Sydney compared with 74.74 U.S. cents prior to the decision.
To keep the economy ticking along, five of 23 forecasters surveyed by Bloomberg are now beginning to predict a cut within the next year, as house prices begin to cool in the overheated eastern housing markets.
The broad-based pick-up in the global economy is continuing, Lowe said, with above-trend growth expected in a number of advanced economies.
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When quizzed whether this would mean he could get everything he wanted, his response was: "Yes I do think that is the way you start".
That was easily the biggest surplus since the series began in 1959 and owed much to higher prices for iron ore and coal, though those have come off their peaks in the last month or so.
In a move that was widely predicted, the RBA made a decision to maintain the current official cash rate at its record low of 1.50 per cent.
The RBA said in minutes from its May meeting that it was closely monitoring the labor and housing markets.
Over the last month, financial markets have nudged higher bets on a rate cut by the end of the year to a probability of around 20%.
Reserve Bank governor Philip Lowe dismissed the likely slowdown as a temporary "quarter-to-quarter variation in the growth figures", insisting that robust jobs growth and an improvement in business conditions would send GDP growth back above 3 per cent in coming years.
However, Westpac has now halved its GDP forecast to a 0.2 per cent rise for the quarter and Commonwealth Bank has lowered its prediction from 0.3 per cent to 0.1 per cent, while National Australian Bank is sticking with its call for a 0.1 per cent contraction in the quarter "with slight downside risks".