Forex Marketz Daily Forex News – Fully Markets Update
The Aussie dollar (AUD/USD) went on a ballistic and volatile roller coaster of a ride after the Reserve Bank of Australia (RBA) dialed up its rhetoric in its post monetary policy statement to the press.
The RBA did everything it could to talk down The Aussie dollar in the statement after their monetary policy announcement. RBA Governor Philip Lowe said that recent rise with the local currency will “contribute to subdued price pressures.” Phillips added that further gains “would be expected to result in a slower pick-up in economic activity and inflation than currently forecast.”
The move lower with the Aussie was short lived. The AUD then swiftly recovered to trade at levels before the RBA monetary policy announcement crossed the wires. While the RBA is in no hurry to hike rates as they are arguing that wage growth is remaining subdued for quite some more time and that supervisory measures meant to cap household debt to cool the housing market are proving to be effective, the central bank remains committed to a wait and see approach with monetary policy for now.
Aussie Dollar moves in line with Rate Expectations
The standstill with the central bank’s interest rates and monetary policy makes the Australian dollar attractive for yield seeking investors. There is a prevailing environment where most of the G 10 central banks have a long way to go to erode the AUD’s rate advantage.
The US Dollar is the only currency looking to close the rate gap between its baseline lending rate and the Australian dollar. However, recent skepticism about the US Federal Reserve’s hawkish statements, with US President Donald Trump’s inability to govern, have put that fact in doubt.
