RBA leaves rates on hold

5 April, 2017

RBA leaves rates on hold

The Australian dollar is sharply lower today after a monetary speech earlier today from the RBA who raised concerns over. At 4.31pm(GMT) the Aussie dollar was trading at US75.62c down from 76.04c in yesterday’s trading.

Although the RBA kept rates on hold today at 1.5 percent, the following monetary statement was noticeably dovish with governor Philip Lowe pointing to the unemployment rate and low inflation as some of the primary factors which many analysts predict leaves an interest rate cut possible in the nearest future,

"Some indicators of conditions in the labor market have softened recently. In particular,the unemployment rate has moved a little higher and employment growth is modest. The various forward-looking indicators still point to continued growth in employment over the period ahead. Wage growth remains slow" Mr Lowe said

"Inflation remains quite low. Headline inflation is expected to pick up over the course of 2017 to be above 2 per cent. The rise in underlying inflation is expected to be a bit more gradual with growth in labor costs remaining subdued."he added

Cutting rates remains a major headache for the RBA as any reduction is likely to see borrowers take on more credit for real estate which will push up house prices even further which will lead to an inevitable crash in prices,

"The RBA Governor has made clear in previous public pronouncements that while the Bank would like to see the unemployment rate come down more quickly and inflation return to target more quickly, the Bank has had concerns that a further cut in interest rates could induce some households to borrow beyond their means." Noted Ivan Colhoun at National Australia Bank

"The Governor has also noted that if the unemployment rate were to begin to rise, then the Bank could reassess the question about the time taken to return to the inflation target  and implicitly would be more likely to reduce interest rates". He added.


Source link  
RBA misleads investors on AUD

The Australian dollar has dropped sharply in today's Asian trading session on the back of disappointing data and throws into question yesterday...

Brexit doubts pressure pound

The British pound has enjoyed a good run against its US counterpart ever since rumors spread that the EU and the UK were close to reaching a deal...

Gold steady ahead of key news

The gold price is trading slightly higher today as the market awaits the senate testimony later today from Jeremy Powell who is Donald...


Gold looks to go past $1300

The gold price remains well supported today after yesterday’s stellar gains on the back of a less than convincing speech from The US Federal Reserve...

Gold remains supported

After falling sharply on Monday, the gold price has stabilized over the last 2 days and it looks as if for now, the precious metal has found strong...

US dollar hit from 2 sides

The US dollar is under pressure against the major currencies today as fears grow over the possibility of tax reform as well as disastrous results...


Australian dollar has further to fall

The Australian dollar is under further pressure today after yesterday’s spectacular plunge which seems to have put to bed any interest rate hike...

Gold technical review

The gold price has finally stabilized today after suffering 3 days of heavy losses and we may be in the process of a double bottom formation. It seems as if the news out of Spain...

Oil set to rebound

The Oil price has finally settled in today’s trading after a week of heavy losses on the back of profit taking and some say that the price may once again head higher. Following a solid month of gains...

  


Share: