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.

0

Notifications

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

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
GBP/USD
Bearish
Low
High
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
More View more
Real Time News
  • #PELOSI SAYS WE ARE GOING TO PASS THE INFRASTRUCTURE BILL THIS WEEK PELOSI SAYS SHE WILL NEVER BRING TO THE HOUSE FLOOR A BILL THAT DOESN'T HAVE THE VOTES TO PASS $USD $SPX $XAUUSD
  • Short-term uncertainties to keep the pressure on equity markets. Get your weekly equities forecast from @JMcQueenFX here: https://t.co/JLMDPZKvN8 https://t.co/YbdJnwoqj1
  • Many people are attracted to forex trading due to the amount of leverage that brokers provide. Leverage allows traders to gain more exposure in financial markets than what they are required to pay for. Learn about FX leverage here: https://t.co/BdgFmkRxVw https://t.co/hqW38VawJl
  • - Unreal atmosphere - Shame about the result, but no complaints - Usyk masterclass - Heavyweight division blown wide open https://t.co/BKCLJTDk9h
  • The USD could still rally a bit from here, but has resistance not far ahead that it will need to overcome if it is to extend to a larger degree. Get your weekly $USD technical forecast from @PaulRobinsonFX here: https://t.co/n0CVWWOJDe https://t.co/0uLjsQ2gwM
  • When it comes to buying and selling forex, traders have unique styles and approaches. Learn about buying and selling forex here: https://t.co/D8DXSAdpqC https://t.co/nfiFAlyYXv
  • Slippage can be a common occurrence in forex trading but is often misunderstood. Understanding how forex slippage occurs can enable a trader to minimize negative slippage, while potentially maximizing positive slippage. Learn about FX slippage here: https://t.co/Blrl0unrdT https://t.co/mIsVJ4zTbB
  • What is your forex trading style? Take the quiz and find out: https://t.co/YY3ePTpzSI https://t.co/hymrumanUY
  • Greed is a natural human emotion that affects individuals to varying degrees. Unfortunately, when viewed in the context of trading, greed has proven to be a hindrance more often than it has assisted traders. Learn how to control greed in trading here: https://t.co/kODPAfs2Iz https://t.co/6dAqxsVfxJ
  • The results of this weekend’s German Federal Election will likely dominate Euro sentiment at the start of the week ahead but after a possible EUR/USD bounce they will have little long-term impact. Get your weekly $EUR forecast from @MartinSEssex here: https://t.co/Xu3ZT7EtrW https://t.co/5VHKn52MaA
Australian Dollar Whipsaws As RBA Cuts Rates For Second Straight Month

Australian Dollar Whipsaws As RBA Cuts Rates For Second Straight Month

David Cottle, Analyst

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

  • The RBA cut its key rate to 1%, a new all-time low
  • The move was not unexpected although an August move was thought more likely until recently
  • Markets are likely to price in further reductions

Join our analysts for live, interactive coverage of all major economic data at the DailyFX Webinars. We’d love to have you along.

The Australian Dollar slipped initially but soon recovered Tuesday as the Reserve Bank of Australia cut interest rates for a second month straight.

The Official Cash Rate is now 1.0%, a new record low. The RBA last cut it on June 4., having previously left it alone at 1.50% since August, 2016.

Justifying its action, the RBA said that another reduction would help utilize spare capacity, boost inflation and assist in job creation. No doubt there will be those who wonder whether another cut will really help all that much after such a long period of relatively low rates, but the cut was not a surprise to the markets which anticipated such a move either this month or in August.

Australian Dollar Vs US Dollar, 5-Minute Chart

AUD/USD took an immediate hit on the news but its composure since attests to the market already pricing in the move. The RBA didn’t give much away as to how things might play out from here, but it did say in a statement that it was ready to support growth and inflation as needed so further cuts cannot be ruled out by any means.

On its daily chart the Australian Dollar has risen since late June despite a clear lack of monetary policy support, thanks to a couple of supportive factors. The clearest of these was probably broad US Dollar weakness. The markets moved last month to price in lower US interest rates from the Federal Reserve. This prospect in turn engendered a revival in risk appetite, something which also helped the Australian Dollar, linked as its fortunes are to global growth prospects.

Austalian Dollar Vs US Dollar, DailY Chart

The Aussie clearly still remains vulnerable to weak Chinese data though. This week’s news of manufacturing-output’s return to contraction in the world’s second-largest economy clearly knocked AUD/USD.

The bar to deeper rate reductions in Australia may be higher than the market thinks. RBA Governor Philip Lowe has often mused on the likely diminishing efficiency of stimulus under current, already loose monetary conditions.

Still, the markets will probably doubt that they’ve seen the end of the easing cycle in Australia unless the economic data make that impossible and, as that is likely to mean that inflation must pick up sustainably, that evidence will take time to collect.

This move is likely to keep a lid on the currency, which no doubt it was partially intended to. A weaker Australian Dollar may make that elusive inflation target easier to hit.

Australian Dollar 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.

DISCLOSURES