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
EUR/USD
Mixed
Oil - US Crude
Bullish
Wall Street
Bullish
Gold
Mixed
GBP/USD
Bullish
USD/JPY
Mixed
More View more
Real Time News
  • #NOK, #SEK and #AUD are expected to be the most-active #G10 FX with one-week implied volatility at 13.48, 11.43 and 11.04 respectively [delayed] -BBG
  • $XAGUSD: Short-term price action falls below 100 on CCI, while remaining above the 55 period EMA. Get your #silver market update from @Tams707 here:https://t.co/nkK3ZizKj0 https://t.co/lAd03ptyF4
  • @JohnKicklighter Who knows... perhaps their next venture will include printing fake meat for $BYND 😅
  • AUD/USD and NZD/USD drift into the crosshairs as an RBA decision and NZ jobs data loom.Get your market update from @RichDvorakFX here:https://t.co/1Z8ZqQK6ih https://t.co/Hc8cfQNtys
  • #NASDAQ100 hit an all time high over the past 24 hours, but key resistance held in futures $AUDUSD fell as local virus cases grew, awaiting the #RBA next What else is in store for APAC markets today? https://www.dailyfx.com/forex/fundamental/daily_briefing/daily_pieces/asia_am_briefing/2020/08/03/Nasdaq-100-Record-High-Faces-Resistance-AUDUSD-Turns-to-RBA-Next.html?CHID=9&QPID=917702&utm_source=Twitter&utm_medium=Dubrovsky&utm_campaign=twr https://t.co/ImuoXUAeBa
  • Kodak shares surged over 2,100% in the first half of last week. At present, it is down 75% from its new record high. Cryptomining and Covid vaccine production support. Look, forward to the next turn. Maybe a camera-related venture... https://t.co/7neSCnwzW8
  • 🇰🇷 Inflation Rate YoY (JUL) Actual: 0.3% Expected: 0.35% Previous: 0% https://www.dailyfx.com/economic-calendar#2020-08-03
  • 🇰🇷 Inflation Rate YoY (JUL) Actual: 0.3% Expected: 0.35% Previous: 0.0% https://www.dailyfx.com/economic-calendar#2020-08-03
  • Heads Up:🇰🇷 Inflation Rate YoY (JUL) due at 23:00 GMT (15min) Expected: 0.35% Previous: 0.0% https://www.dailyfx.com/economic-calendar#2020-08-03
  • The Japanese Yen saw large inflows with bullish positioning rising some $1.1bln to $3.4bln as the precipitous decline in US yields dragged USD/JPY lower.Get your market update from @JMcQueenFX here: https://t.co/SJN9QC3kEF https://t.co/xcXG9Qk3Da
Australian Dollar Whipsaws As RBA Cuts Rates For Second Straight Month

Australian Dollar Whipsaws As RBA Cuts Rates For Second Straight Month

2019-07-02 04:33:00
David Cottle, Analyst
Share:

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

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.