Aussie Sinks After RBA Chief Hints at Possibility of Interest Rate Cut

The Australian dollar slumped today, erasing yesterday’s gains, after Philip Lowe, Reserve Bank of Australia Governor, mentioned in his speech that an interest rate cut is as likely as a hike.
Previously, the RBA was saying that the next move in rates is more likely to be a hike, and yesterday’s monetary policy statement seemed to confirm this. Yet today, Governor Lowe contradicted that in his speech titled “The Year Ahead,” saying:

Looking forward, there are scenarios where the next move in the cash rate is up and other scenarios where it is down. Over the past year, the next-move-is-up scenarios were more likely than the next-move-is-down scenarios. Today, the probabilities appear to be more evenly balanced.

AUD/USD plunged from 0.7232 to 0.7131 as of 11:51 GMT today. EUR/AUD jumped from 1.5756 to 1.5962.

If you have any questions, comments or opinions regarding the Australian Dollar,
feel free to post them using the commentary form below.

Leave a Reply

Your email address will not be published. Required fields are marked *

five + three =