A measured tone from the RBA

5 April, 2016

The Aussie finds itself former in the wake of the RBA decision overnight, where there was no surprise to see rates kept unchanged. There was a longer reference to the exchange rate in the accompanying statement, where the RBA stated that the rise in the Aussie “could complicate the adjustment underway in the economy”. This was no attempt to “talk down” the currency, hence the modest short covering after the meeting. They also made reference to the international situation, rather than domestic factors, as being the primary driver of the Aussie strength. The explicitness of the RBA’s past references to the over-valuation of the currency in their statements (going back two to three years) did not go down well with its international counterparts, hence the more measured tone this time around.

It’s fair to say it was a tentative start to the week in most markets, apart from oil which finished the session near the lows, maintaining the opening gap lower. For currencies, the preference remains for a weaker dollar, with the traditional driver of policy and economic divergence not being taken as sufficient anymore for strength, especially after that story failed to lift the currency in the first quarter. Even for sterling, the price action suggested that the traditional driver of weakness year to date (the impending EU referendum) is struggling to be a continued downward force on the currency. For today, we have some further final services PMI data in the Eurozone ahead of the UK equivalent release at 08:30 GMT, with trade and ISM data following later in the US.


Source link  
USD Bounces From Month Low

Trump administration has presented its 2018 budget plan to Congress last evening. The budget plan calls to slash $3.6 trillion...

Dollar index hit a new low

The dollar index hit a new post presidential election low of 96.95 on Friday May 19th. EUR/USD hit a high of 1.1211...

USD Hit Post Election Low

To date the dollar index has almost given up all of the post presidential election rally...


BoE Expected to Keep Rates Steady

ECB Governor Draghi will make a speech in the Dutch Parliament at 12:00 BST today. It will be Draghi first speech...

Trump's Tax Reform Plan

US Treasury Secretary Mnuchin announced Trump’s tax reform plan in a press conference...

Corporate Earnings Lift US Stocks

Last week the US President Trump stated on twitter...


Market Concerns Eased

The first-round voting of the French presidential election was revealed on Sunday night...

Dollar Plunged on Trump Second Statement

The dollar index fell to a 2-week low of 99.91 in the early hours...

Markets Eye on the First Trump-Xi Meeting

US President Trump and Chinese president Xi Jinping, are scheduled to meet today at Trump’s Mar-a-Lago resort in Florida...

  


Share: