wrapper

Will RBA cut rates further?

Friday, May 20 2016
Bank of Australia governor Ian Macfarlane was in the Australian media overnight speaking about the direction global growth is headed and what effect that is having on monetary policy decisions at home. It was his comments around on the Aussie Dollar and why current governor Glenn Stevens and the RBA felt they ‘had to’ cut rates earlier this month that pricked my trading interest.
“Their problem is that financial markets, particularly offshore, assume a mechanical application of what they regard as the standard model.” When the 2-3% target band was introduced, it wasn’t within a global environment of weak inflation and zero interest rates. Neither were financial markets running the constant news cycle that we see now where even the smallest of central bank leaning can have monumental effects on where traders push markets.
 
“The inflation targeting approach says that if inflation forecasts are below target, we should run an easy monetary policy – we already have that. It doesn’t say that each time we receive an inflation statistic showing it is below target, we have to cut interest rates.” The RBA are one of the more conservative central banks in the world and any decision to continue cutting rates wasn’t ever taken lightly (as the minutes showed).
 
Aussie is currently being traded around 0.7220 area. Pair is likely to find support around 0.7150 handle and resistance above 0.7250 level. Later today, in the US session, Existing Home Sales figures will be released.
More in this category: « Philly Fed Manufacturing Index missed market forecasts Eurozone Current Account recorded surplus of €27.3 billion »

Latest from Editor

About Us

Forex Web News is part of Rolling Capital Network providing financial consulting.

Within the Forex Web News we provide our readers with expert and timely technical analyses, fundamental analyses and news; with one aim – for our readers to make best possible financial decisions.

Forex Web News desks and analysis department follow the international markets closely and create high quality proprietary content on a both daily and weekly basis.

.

All our analysts have several years of trading and analysis experience. The Forex Web News analysis team creates daily and weekly analyses and offer forecasts regarding where they believe the markets are heading. Our readers are provided with data displayed both in texts and on graphs, providing them the fullest understanding of what is happening in the market place.

We are constantly growing our news desks and our analysis departments as we strive to broaden the content we provide to visitors of the Forex Web News.

Disclaimer

Rolling-capital.com – The company, employees, subsidiaries and associates, are not liable nor shall they be held liable jointly or severally for any loss or damage as a result of reliance on the information provided on this website. The data contained in this website is not necessarily provided in real-time nor is it necessarily accurate. All prices herein are provided by market makers and not by exchanges. As such prices may not be accurate and they may differ from the actual market price. rolling-capital.com bears no responsibility for any trading losses you might incur as a result of using any data within the Forex Web News.