More rate cuts this year unlikely - survey

None of the 14 economists surveyed by AAP are expecting the RBA to cut the cash rate on Tuesday and only two are predicting one before the end of the year.

The Reserve Bank has decided to keep interest rates on hold at 4.1 per cent for the third consecutive month. Source: Bianca De Marchi

The Reserve Bank is unlikely to cut rates again this year.

All 14 economists surveyed by AAP expect the RBA to keep the cash rate unchanged at its July meeting on Tuesday, and only two expect another cut before the end of the year.

The central bank cut by a quarter of a percentage point in February and again in May, taking the cash rate to a new record low of two per cent.

HSBC Australia chief economist Paul Bloxham said the RBA is in a "wait and see" mode, assessing the impact of rate cuts before making further moves.

The economy is moving away from being driven by mining investment, and the booming housing market is beginning to take up the slack, Mr Bloxham said.

House prices rose 9.8 per cent in the year to June and building approvals hit a new record high in May.

There are other signs the February and May rate cuts are feeding through to the economy, Mr Bloxham said.

"Business surveys showed improving conditions and confidence in May, which could reflect the impact of this year's rate cuts as well as the government's more pro-growth budget."

But retail sales remain quite weak, and slow wages growth should keep a lid on inflation, Mr Bloxham said, allowing the RBA to keep the door open for more interest rate cuts if needed.

JP Morgan Australia chief economist Stephen Walters said it is too early to measure the impact of May's rate cut, and larger factors will impact future interest rate decisions.

They include the outcome of the Greek debt crisis, the timing of the next US Federal Reserve interest rate hike, and movements in the value of the Australian dollar.

"The direction of Australian dollar could be crucial in determining whether the RBA trims the cash rate again," Mr Walters said.

"The Australian dollar remains anchored in the recent trading range, our relative high yields and AAA sovereign rating preventing a sustained slide, despite lower commodity prices."

Mr Walters said its appears RBA officials are hoping rate hikes in the US later this year will push the Australian dollar lower.

"Governor Stevens again called for lower Australian dollar in his speech earlier this week, but it seems markets have stopped listening," he said.