Forex Marketz Daily Forex News – Fully Markets Update
The Aussie dollar (AUD/USD) Forex market fell this morning, at first, as the Reserve Bank of Australia (RBA) Governor Philip Lowe spoke this morning. The central bank governor stated that the RBA board is prepared to be patient on the economy. He hinted that an interest rate adjustment will not happen for some time yet. Mr. Lowe stated that he prefers a prudent approach and steady approach to monetary policy.
RBA Governor Phillip Lowe reiterated the bank’s status quo that the current, and record low, official cash rate of 1.5 percent is supporting jobs growth. He also says that this approach will return the economy to its target of two percent. Once again, the Lowe expressed concern about the strength of the Aussie dollar. He stated that further Aussie dollar gains would slow any uptick in inflation and labor market improvement.
The Aussie Reverses early Losses
During the question and answer session, Lowe mentioned that market pricing on interest rate moves appears to be reasonable. These predictions place in a better than even chance, with overnight index swaps, of an RBA rate hike by the August 2018 monetary policy decision. Lowe said that a rate move is some time away, he added that it would likely be an increase to their OCR.
The Forex markets appeared to be accepting what was perceived as relatively dovish rhetoric. The Australian Dollar quickly retraced its losses and moved higher against its G-20 Forex counterparts. Yesterday, on an interesting side note, the Reserve Bank of New Zealand also outlined that their next rate move will likely be an increase. The RBA has finally joined the hawkish playing field.
