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.

Free Trading Guides
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Oil - US Crude
More View more
Real Time News
  • The AUD has been hit by the risk-appetite pullback occasioned by the spread of Wuhan-strain coronavirus. This week may see domestic focus return, if headlines allow, with key inflation data due. Get your $AUDUSD market update from @DavidCottleFX here: https://t.co/UIpwno0pSq https://t.co/kib4d1mA0q
  • RT @anilvohra69: USD inverted (red) is correlated to Excess Reserves (blue) and Reserve Balances (green). 1/2 https://t.co/bbO1pPWY4F
  • RT @FactSet: $SPX is reporting a decline in earnings of -1.9% for Q4, led by the Energy (-42%), Consumer Discretionary (-14%), and Material…
  • Becoming a forex trader means living and breathing the excitement, risk and reward of trading in the biggest and most liquid market in the world. Do you have what it takes? Read here to discover the qualities and processes it takes to build consistency: https://t.co/EfWEACQ6Cz https://t.co/6iMyDFqnqe
  • Knowing how to accurately value a #stock enables traders to identify and take advantage of opportunities in the stock market. Find out the difference between a stock's market and intrinsic value, and the importance of the two here: https://t.co/QszmdZFxlk https://t.co/2mjzvYvgSn
  • Previewing the Texas Rangers new home! https://t.co/WITZGSQPlc
  • Thanks for having me on @MartinSEssex https://t.co/fg8uOe16wr
  • The MACD is often used with its default setting when entering trades. However, this versatile indicator can be customized to assist traders in exiting trades too. Learn how to better incorporate the MACD into your trading strategy here: https://t.co/HnY7gzsI2q https://t.co/5F1DSvAXyy
  • What are some factors affecting $GBP as we head into 2020, quarter one? Download your Sterling fundamental forecast with @nickcawley1 here to find out: https://t.co/YfDSYSATK9 https://t.co/ANFLIuDY4J
  • Trading Global Markets new #podcast features @DailyFX Anlayst @PeterHanksFX , who discusses what assets would benefit in the next #recession. Tune into this new podcast episode hosted by @MartinSEssex here: https://t.co/Twr44cZ1GB https://t.co/llKzvZGDpQ
Australian Dollar Whacked By RBA Again. Growth, CPI Calls Slashed

Australian Dollar Whacked By RBA Again. Growth, CPI Calls Slashed

2019-02-08 01:33:00
David Cottle, Analyst

Australian Dollar, Reserve Bank of Australia Monetary Policy Statement Talking Points:

  • AUD/USD has lurched lower again
  • This time weakness came on a batch of lower central bank forecasts
  • Focus is back on domestic interest rates, and that could be very bearish for the Aussie

First-quarter technical and fundamental forecasts from the DailyFX analysts are out now.

The Australian Dollar was hit hard Friday by market reaction to its own central bank – the second time this week the Reserve Bank of Australia has dealt it a knockout punch.

The RBA made drastic cuts to growth forecasts, perhaps most notably its call for Gross Domestic Product Growth by the end of this year’s first half. Where previously it had expected annualized growth of 3.25%, it now looks for only 2.5%. There were cuts to its calls across the quarterly-forecast board.

Inflation forecasts were also lowered, with annualized Consumer Price Index inflation seen at just 1.75% by year end, from 2.25% before. Significantly inflation is not expected to edge back into the central bank’s target band before the end of next year.

Now it’s been quite clear that the central bank had been too optimistic for some time, and to that extent it’s probably good that exuberance has been reined in, in a world where slowdown is evident in many economies, from China to Germany. Indeed, the RBA said on Friday that China indicators suggest, ‘a more pronounced slowing in momentum.’

The RBA sees the resilience of household consumption as the key domestic uncertainty, and stated again that the interest rate prognosis was now broadly balanced. It was this dramatic switch from a formerly unwavering belief that the next move was likely to be a rise, that hit the Aussie on Wednesday.

AUD/USD has now fallen by nearly two US cents this week, as market focus has shifted to worrying about US caution on raising interest rates to mulling the chances that the RBA might cut its own.

One-two punch from the RBA. Australian Dollar Vs US Dollar, Hourly Chart.

This possibility has been priced into Australia interest-rate futures markets for some time, underlining the extent of belief that the previous RBA forecasts were no longer appropriate.

However, this week’s news that the RBA now feels the same has clearly put the local currency under enormous pressure. There will probably be renewed suspicions that the central bank doesn’t mind this at all. Last year it was often relaxed about a lower AUD/USD rate, saying it gave a helpful boost to doggedly low inflation.

Markets will now be on watch for any similar commentary in the days and weeks ahead.

Resources for Traders

Whether you’re new to trading or an old hand DailyFX has plenty of resources to help you. There’s our trading sentiment indicator which shows you live how IG clients are positioned right now. We also hold educational and analytical webinars and offer trading guides, with one specifically aimed at those new to foreign exchange markets. There’s also a Bitcoin guide. Be sure to make the most of them all. They were written by our seasoned trading experts and they’re all free.

--- Written by David Cottle, DailyFX Research

Follow David on Twitter@DavidCottleFX or use the Comments section below to get in touch!

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


News & Analysis at your fingertips.