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
  • Huawei's CFO Meng Wanzhou reached deal with the US Dept of Justice to return her to China - Dow Jones
  • Cleveland Fed President Loretta Mester says: - sees US GDP in 2022 between 3.75 and 4% - Supports tapering in November and concluding over the first half of 2022 - After liftoff, accommodative policy needed for some time
  • Fed Chairman Jerome Powell doesn't comment on the growth forecast or monetary policy in his introductory remarks
  • Kansas City Fed President Esther George says: - The labor market friction is fading barring a resurgence of virus - A 'normal' economy is likely to remain elusive for some time - Asset buying effects complicate the judging rate change plan
  • The risk rally that charged the S&P 500 and brethren post-FOMC has stalled into Friday's open. DailyFX's @JohnKicklighter discusses what is driving markets post Fed👇
  • 🇺🇸 New Home Sales MoM (AUG) Actual: 1.5% Previous: 6.4%
  • China has announced that they will be cracking down on Cryptocurrency mining and while this has been a reoccurring theme, regardless of that fact Get your market update from @JMcQueenFX here:
  • Looks like they couldn't hold the 8.8000 line for $USDTRY. Record high exchange rate (favoring Dollar over Turkish Lira) despite a still-17.75 percentage point differential in their benchmark rates...
  • 🇺🇸 New Home Sales MoM (AUG) Actual: 1.5% Previous: 1%
  • RT @elerianm: Thank you @LizAnnSonders for this and, more generally, for all your informative and insightful tweets. Two things to add from…
Australian Dollar Ticks Down, RBA Statement Again Frets Strength

Australian Dollar Ticks Down, RBA Statement Again Frets Strength

David Cottle, Analyst

Talking Points:

  • AUD/USD slipped as investors read the RBA’s quarterly roundup
  • The central bank worried about the currency’s strength, and its effects on growth
  • But then again usually does.

Just getting started in the AUD/USD trading world? Our beginners’ guide is here to help

The Australian Dollar slipped Friday following the release of the Reserve Bank of Australia’s quarterly monetary policy statement in which the central bank fretted about the baleful effects of too-strong a currency.

The statement said that any further rise in the Australian Dollar’s exchange rate would slow the pickup in both economic growth and inflation. AUD/USD duly slipped, but it is important to note that this complaint from the RBA is one of the most commonly-sung verses in all of central banking and not in any sense new. The Aussie probably won’t stay down for too long on this and indeed was already starting to recover within minutes of the release.

Australian Dollar Ticks Down, RBA Statement Again Frets Strength

The RBA has been worrying about the effects of currency strength for much of this year as AUD/USD edged up to two-year highs and has refused to fall far since despite interest-rate differentials which would seem to support the greenback.

The RBA’s inflation forecast was lowered slightly. It now sees the Consumer Price Index rising 2% on-year by June 2018, rising to 2.25% by the end of 2019. The re-weighting of the CPI ‘basket; -used to calculate the index- will mean that recent inflation readings have overstated underlying pricing power the RBA reckons.

The central bank was however quite bullish on jobs and growth, saying that leading indicators point to solid gains over the next six months. However, it also noted that household consumption likely slowed again in this year’s third quarter, held back by slow income growth and debt.

All up this report strongly suggests that current market interest rate bets are not too far short of the mark as far as the RBA is concerned. Futures positioning does not suggest a fully-priced increase in record-low Australian interest rates until the start of 2019.

AUD/USD remains in broad downtrend from the highs of 2017 – as well it might with the RBA so vocally and regularly stating its opposition to gains. That said the Aussie seems to be staging a modest fightback, with a base apparently building around this week’s lows – the point where Friday’s close will be most interesting.

Australian Dollar Ticks Down, RBA Statement Again Frets Strength

If the pair manages a weekly finish above the 0.72626 level it will further support the ranging theory and make an upside test of the current, venerable downtrend channel likely, however much that might upset the central bankers of Sydney.

--- Written by David Cottle, DailyFX Research

Contact and follow David on Twitter:@DavidCottleFX

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