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RBA surprises – what more could be in store? - Bank of America-Merrill Lynch

FXstreet.com (London) - RBA surprises – what more could be in store? - Bank of America-Merrill Lynch

The RBA cut its cash rate by 25bp to an all-time low of 2.75%. recently, and surprised the market by doing so. Saul Eslake, writing for Global Economic Weekly at Bank of America-Merrill Lynch, said, reporting today, that ‘ the language of the post-meeting statement leaves the door open to another cut next month.’

He went on to say ’ The Board decided to use “some of the scope” afforded by the inflation outlook to “encourage sustainable growth in the economy.”' He then added, '' this particular choice of words – which at least on the surface represents a distinct change of language from that used in the closing paragraphs of the three previous post-meeting statements, suggests that the RBA Board believes that there is “scope” for more rate cuts, if necessary, in order to support economic growth and offset the effects of the persistent strength in the exchange rate.''

Forex Flash: Rate cutting euphoria envelops the land – Deutsche Bank

On the subject of rate cuts, the BoE yesterday defied joining the recent trend of surprise central bank easing seen in the past week. According to Macro Strategy Analysts J. Reid and C. Tan at Deutsche Bank, “the past week has seen six central banks cut policy rates: the ECB, Danmarks Nationalbank, the Reserve Bank of Australia, the Reserve Bank of India, the National Bank of Poland and, last night, the Bank of Korea which collectively represent some 23% of world GDP. The BoE's decision was not a surprise especially given the recent momentum in UK data flow.”
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Forex Flash: USD/JPY shows market asymmetry - Societe Generale

Kit Juckes, Global Head of Currency Strategy at Societe Generale notes that the Yen’s (Abe-induced) fall from grace is a good example of market asymmetry playing out.
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