News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.



Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events


Economic Calendar

Economic Calendar Events

Free Trading Guides
Please try again
More View more
Real Time News
  • Evergrande shares jump as much as 32%, with over 240 million shares traded -BBG
  • Technical analysis of charts aims to identify patterns and market trends by utilizing differing forms of technical chart types and other chart functions. Learn about the top three technical analysis tools here:
  • PBOC injects net 110b Yuan in open market operations -BBG
  • RT @BrendanFaganFx: Hang Seng, ASX 200 May See Relief After Fed. Evergrande Set for Restructuring? #Evergrande #HangSeng #FOMC Link: http…
  • The US Dollar seems to be back on the offensive against its major counterparts, pressuring EUR/USD and NZD/USD lower as USD/JPY consolidates. USD/CHF surges past key resistance. Get your market update from @ddubrovskyFX here:
  • Chinese estates' Evergrande loss assumes all shares sold -BBG #Evergrande
  • RT @FxWestwater: Australian Dollar Fights FOMC-Charged US Dollar After Upbeat PMI Data Link: $AUDUSD…
  • Heads Up:🇯🇵 Foreign Bond Investment (18/SEP) due at 23:50 GMT (15min)
  • Gold prices gain as potential systemic risks out of China's Evergrande Group roil broader markets. Meanwhile, iron ore is ticking higher after a big drop on Monday as China steps up steelmaking curbs. Get your market update from @FxWestwater here:
  • #ASEAN based #USD index continues to extend the bounce off September lows post #FOMC This follows a test of the 100-day SMA as well as a rising trendline from June Eyes on the 38.2% Fib extension before potentially retesting the July/August highs
AUD/USD Tumbles as RBA Cuts Rates For the First Time in a Year

AUD/USD Tumbles as RBA Cuts Rates For the First Time in a Year

Daniel Dubrovsky, Strategist

Talking Points

  • Australian Dollar tumbles after the RBA monetary policy announcement
  • The central bank cut rates to 1.75% versus 2.00% expected by economists
  • RBA policy makers noted that recent inflation data was unexpectedly low

Having trouble trading the Australian Dollar? This may be why.

The Australian Dollar declined against its major peers after the Reserve Bank of Australia cut rates for the first time since May 2015. Heading into the announcement, economists were expecting the central bank to leave rates unchanged at 2.00 percent. However, overnight index swaps were pricing in a 55 percent probability of a 25 basis point cut. This meant that regardless of the outcome, half of investors would likely have been caught on the wrong side of the tracks.

During April’s monetary policy announcement, the Reserve Bank of Australia noted that low inflation could provide the scope for further easing if appropriate. Last week, the country’s first quarter inflation report showed that prices increased 1.3 percent versus 1.7 percent expected.

Diving into today’s monetary policy announcement, the central bank mentioned that inflation has been low for some time and that recent data was unexpectedly low. Members noted that in part, this pointed to a lower outlook for prices than previously forecasted. Inflation aside, the central bank said that the domestic economy is continuing to rebalance and that indications point to continued GDP growth in 2016. Outside of Australia, members noted that recent actions by Chinese policymakers are supporting the near-term outlook.

Following the announcement, overnight index are pricing in a 100 percent chance that the Reserve Bank of Australia will cut rates again by 25 basis points at its next meeting in June. As for the next 12 months, investors envision a 98 percent chance of two rate cuts. With that in mind, inflation-related news could be in the spotlight for policy makers.

Meanwhile, the DailyFX Speculative Sentiment Index (SSI) is showing a reading of -1.03 following the announcement, meaning that for every trader long the AUD/USD, there are 1.03 on the short side. The SSI is a contrarian indicator, implying further AUD/USD strength ahead.

Want to learn more about the DailyFX SSI indicator? Click here to watch a tutorial.

AUD/USD Tumbles as RBA Cuts Rates For the First Time in a Year

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.