The strength of the Australian dollar is the one element that may prompt the Reserve Bank of Australia to cut rates soon, although most economists say there will be no more rate cuts this year.
The central bank meets on Tuesday and given growth is strong, commodity prices have risen and the drag from the mining investment decline is fading, the market is pricing in close to a zero chance of a rate cut. Economists agree.
The latest Bloomberg survey shows only eight of 24 analysts expect a cut to 1.25 per cent in November.
HSBC chief economist Paul Bloxham argues that rather than asking when the next cut will be, the case for no further cuts is strengthening.
"The key challenge to this view is that the lift in commodity prices and local growth could present an upside risk to the Australian dollar," said Mr Bloxham. "And if the Aussie dollar were to lift, it could weigh on export growth and inflation. But our central case sees the RBA on hold in the coming quarters."
Market watchers will pay close attention to the language of the RBA's upcoming statement. Given former governor Glenn Stevens reportedly scripted his own statements, the transition to new governor Philip Lowe may offer a different tone to what the market is used to.
That said, as Prashant Newnaha, rates strategist at TD Securities points out, the RBA has run with virtually an identical statement for the last three meetings, one of which actually included August's rate cut.
"Speeches by Christopher Kent and new RBA governor Philip Lowe earlier this month both struck an upbeat tone," said Mr Newnaha from Singapore. "The possibility that the Fed could be closer to hiking rates by year end could also afford the RBA some further breathing space, even though we acknowledge that a Fed hike is not a key driver of the RBA view."
Mr Lowe fronted Parliament last Thursday and economists say his frank discussion rules out any surprises in Tuesday's statement.
"The exception is likely to be a soft tone in discussing the more significant data flow from the September meeting," said Tapas Strickland, economist at National Australia Bank.
Growth ran at an impressive above-trend pace of 3.3 per cent year on year in the second quarter of 2016, and looks to remain well supported. The significant drag mining investment has placed on the economy in recent quarters is beginning to be offset by a pick-up in housing construction, resources and services exports and consumption.
HSBC says mining investment will have levelled out by this time next year.
Inflation is still reading below the RBA's target 2-3 per cent band, however Mr Bloxham suggested the rise in commodity prices will soon flow through to wages growth.
"The lift in income growth should start to support corporate profitability, which could feed through to wages growth," he said. "We see low inflation as having been a part of the rebalancing act, so when the rebalancing is complete, inflation should stabilise."