Australian Dollar Climbs as RBA Rate Cut Bets Fade
- RBA leaves its cash rate unchanged at 2.00 percent as expected
- Australian Dollar climbs more than 0.5 percent versus the USD
- 2-year government bond yields rally signal RBA rate cut bets fade
Follow commentary from top officials as it is released with the real-time news feed
The Australian Dollar climbed more than 0.5 percent versus its US counterpart after the Reserve Bank of Australia left its benchmark lending rate unchanged. All 27 of economists surveyed by Bloomberg predicted that the central bank would not make an adjustment at its October decision. The RBA has now left rates unchanged for 5 consecutive meetings.
Looking at the central bank’s monetary policy statement, the RBA judged that leaving the cash rate unchanged was appropriate at this meeting. Further information on economic and financial conditions will continue to adjust the committee’s outlook for effective policy. Most of what the bank said remained unchanged from its September decision. Yet, the Aussie rallied.
The markets are currently expecting the Reserve Bank of Australia to cut rates at least once over the next 12 months. A lack of a clear cut change in rhetoric perhaps resulted in the markets becoming less certain of a rate cut in the near future. Indeed, Australian 2-year government bond yields rallied more than 1.4 percent in the aftermath of the announcement as the Aussie climbed.
On Wednesday at 07:05 GMT, RBA’s assistant Governor Guy Debelle will present a speech in Sydney. Perhaps his words can offer the markets some insight into the central bank’s economic outlook.
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.