OctaFX | OctaFX Forex Broker
Open trading account

RBA Stevens strikes not so dovish tone; good deal of rate cuts in pipeline

RBA Governor Stevens is testifying before the House of Representatives Standing Committee on Economics, and if one is to make an early judgement on his language, it seems as though he is sounding much less dovish than the market was expecting, which has led to an important boost on the Australian Dollar.

According to the RBA Chief, the Australian economy is near its average trend growth. Referring to China, he sounded confident that the Chinese slowdown is about to end. He said a good deal of interest rate stimulus in pipeline, which is suggestive that rate cuts have been reduced enough for now. This statement will raise the question of a temporary easing cycle being over.

He also mentioned that the high A$ has been relevant factor in setting rates, adding that the RBA Board at Feb. meeting decided prudent to sit still without cutting rates.

The external environment for Australia remains broadly positive, and Stevens does not expect a significant fall in mining investment, with resources exports likely to strengthen substantially.

To sum up, Steven's speech may be a game changer in terms of how RBA monetary policies are perceived going forward, as the sense is that the easing cycle may be over. Expect plenty of commentators speculating on this outcomes in the next few days.

Forex: USD/JPY stalls below 93.50

USD/JPY is currently at 93.11, off fresh weekly lows at 92.77 printed by mid NY session, now finding some resistance around Wednesday's Asian session lows. The pair is down -0.42% for the week so far, retracing from yesterday's Asian session highs at 94.05, following a Nikkei close yesterday down -1.39%, and SP500 close Thursday with -0.63%. No major local news are expected for the coming session.
Read more Previous

Forex: AUD/USD shoots higher on RBA gov comments

The Aussie has just rallied to recent session highs at 1.0309 on not very bearish RBA governor Stevens comments, off fresh 4-month lows printed by late NY trade at 1.0220, to sit at this moment around 1.0291, still slightly negative for the week. “AUD extends gains as RBA Stevens says board was prudent to sit still,” said Kathy Lien in her Twitter account.
Read more Next
Start livechat