The Central Bank of Australia (RBA) decided to keep interest rates unchanged at 4.35%, in line with market expectations. However, the statement softened the Bank's previously hawkish stance. The report may say that the bank is gaining confidence that inflationary pressures are declining in line with recent forecasts, and the statement removed the “excluding nothing” statement - which signals that many of the uncertainty factors that the RBA had previously perceived have disappeared.
RBA Bullock's comments, however, proved a bit more hawkish. The banker commented that some of the data was a bit weaker than expected, giving the board some confidence that inflationary pressures are abating, but looking in vain for a definitive victory over inflation. Bullock maintains that core inflation remains too high, but at the same time, when asked about rate cuts in the near term, she did not outright reject the idea. Investors are now pricing in a ~56% chance of a 25 basis point rate cut next February.
Start investing today or test a free demo
Create account Try a demo Download mobile app Download mobile appIt was the increase in the chances of faster rate cuts in Australia that caused the AUDUSD pair to record sizable declines today.
The AUDUSD pair is trading near 0.75% declines today, which takes the stock down to near the lowest levels seen since August and April of this year. It is worth noting that in the past there was an activation of the demand side in these areas, which supported AUD in the medium term. Now, however, the structure of the declines looks a bit different, the length of the downtrend is longer, which may mean that supply in this case has the market advantage. Regardless of the market outlook, however, it seems that the reaction to the early support zones currently being tested could provide an important indication of the pair's overall trend and possible further movements. Source: xStation
The content of this report has been created by XTB S.A., with its registered office in Warsaw, at Prosta 67, 00-838 Warsaw, Poland, (KRS number 0000217580) and supervised by Polish Supervision Authority ( No. DDM-M-4021-57-1/2005). This material is a marketing communication within the meaning of Art. 24 (3) of Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (MiFID II). Marketing communication is not an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC and Commission Delegated Regulation (EU) 2016/958 of 9 March 2016 supplementing Regulation (EU) No 596/2014 of the European Parliament and of the Council with regard to regulatory technical standards for the technical arrangements for objective presentation of investment recommendations or other information recommending or suggesting an investment strategy and for disclosure of particular interests or indications of conflicts of interest or any other advice, including in the area of investment advisory, within the meaning of the Trading in Financial Instruments Act of 29 July 2005 (i.e. Journal of Laws 2019, item 875, as amended). The marketing communication is prepared with the highest diligence, objectivity, presents the facts known to the author on the date of preparation and is devoid of any evaluation elements. The marketing communication is prepared without considering the client’s needs, his individual financial situation and does not present any investment strategy in any way. The marketing communication does not constitute an offer of sale, offering, subscription, invitation to purchase, advertisement or promotion of any financial instruments. XTB S.A. is not liable for any client’s actions or omissions, in particular for the acquisition or disposal of financial instruments, undertaken on the basis of the information contained in this marketing communication. In the event that the marketing communication contains any information about any results regarding the financial instruments indicated therein, these do not constitute any guarantee or forecast regarding the future results.
