RBA takes the plunge

3 May, 2016

The RBA cut rates overnight, a move that was no wholly a surprise given the much weaker than expected inflation data seen last week. That said, when combined with the tone from the accompanying statement, the Aussie plunged more than 1 big figure to the 0.7560 area, before staging a modest recovery into the European close. One of the factors holding back the RBA in recent months has been the housing market, but here the RBA noted the strengthening lending standards and easing price pressures, which effectively removed the last barrier to easier policy. The move is the latest in an easing cycle that started with rates at 4.75% back in mid-2011, the longest pause being see mid-2013 to late 2014, where rates sat at 2.50%. The effect has been to move the Aussie from over-valued carry trade favourite to a more ‘rank and file’ commodity currency. The move will focus attention on both the RBNZ and BoC, both of whom are now stronger candidates for lower rates.

The other stand-out in overnight price action has been the yen, where we’ve seen a push below the 106.00 level on USDJPY. BoJ Governor Kuroda yesterday warned of the consequences of yen strength on the economy and once again re-iterated the BoJ’s willingness to take further policy measures to hit the 2% inflation target. But markets have become pretty immune to such talk. The yen remains under-valued on many longer-term measures, so for now markets are betting that this will dominate anything that the authorities can do to weaken the currency. The generally weaker tone to the US dollar has also seen the euro and sterling push through key levels, with EURUSD through the 1.1495 mid-October high and cable now at levels seen early Jan. The data calendar is on the light side today for FX markets, with just manufacturing PMI data for the UK at 08:30 GMT and jobs data in New Zealand the next key focus overnight.


Source link  
Oil Inventories to Show a Draw

Expectations (Apr) are expected to be released with a prior reading of 16.7. This data has been weakening since a reading of 52.0 was recorded in...

Chances of RBA Rate Hike

NZDUSD bucked the trend overnight, as most other currencies managed to retrace some of their declines against the USD. The pair hit fresh...

Consumer Sentiment Index Close to Higher

US Fed Boston President Rosengren is due to deliver the keynote speech on the economic outlook, at the Greater Boston Chamber’s Economic Outlook Breakfast...


Chinese president soothes worries

With US Producer Prices data on the way this afternoon, and predicted to be largely as expected, the morning session will be dominated by central bankers...

Markets fall after more tariffs proposal

Friday's session is expected to be volatile, with Non-Farm Payrolls (13:30 UK Time) ahead and President Trump’s proposal for an additional $100B...

Korea gets exemption on steel tariffs

The US and South Korea have reached agreement on a Trade deal that comes with the added bonus for South Korea of a permanent exemption from...


EU Publishes List of Tariffs on US Goods

Over the weekend, the EU published a list of tariffs on US products in response to the US tariffs on Steel and Aluminium. The total value of EU tariffs...

Consumer Price Index and Housing Starts

Eurozone Consumer Price Index – Core (YoY) (Feb) will be released. The consensus points to an unchanged value of 1%. Consumer Price Index...

USD Weakens as Risk-Off Returns

Yesterday, the US announced Tariffs on Steel and Aluminium, which prompted an outcry from various global leaders and an acceleration in the...


In the past 24 hours Bitcoin has lost -3.81% and reached $9017.25. Open your trading account with the best cryptocurrency brokers on special terms today.

In the past 7 days the EUR/USD pair has lost -1.2229% and is now at $1.2229. Start trading and making money on Forex today.

In the past 7 days Ethereum has gained 22.02% and is now at $630.934. Have the most popular cryptocurrencies compared online 24/7.


Top Brokers offering Daily Forex Market Reviews


Forex Currencies Forecasts


Top 10 Forex Brokers 2018

# Broker Review
1easyMarketseasyMarkets90%
2FXTMFXTM87%
3HYCMHYCM85%
4FxProFxPro84%
5FIBO GroupFIBO Group82%
6FXCMFXCM70%
7XMXM68%
8Fort Financial ServicesFort Financial Services67%
9Alfa-ForexAlfa-Forex66%
10HotForexHotForex66%
  


Share: