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19/08/24
59
AUD Soars After Bullock Says Rate Cuts Not Coming
On Monday, the Australian dollar started the week by gaining slightly and AUD/USD traded at about 0.6685, up 0.24% for the day in the European session. The Australian dollar gained to 0.6694, a one-month high.
Governor Bullock of the Reserve Bank of Australia’s hawkish remarks pushed the Aussie higher on Friday. Bullock repeated that in the “near term,” there would be no interest rate cuts. When Bullock said the same after the August 6 meeting and then clarified that this meant at least 6 months, the Australian dollar gained strongly.
The RBA statement after the meeting expressed its frustration that inflation was still too high and was dropping slower than the central bank had anticipated.
The RBA minutes will be released on Tuesday. If the minutes indicate that the RBA has a slight appetite for a rate cut, that may push the Australian dollar lower as the markets conflict with Bullock’s hawkish statement.
The markets have priced in a rate cut of 0.25% in Nov. fully and expect further cuts early next year.
On Tuesday, China will announce its LPR (loan prime rates). China’s central bank surprised the markets a month ago and decreased the rates for the 1-year and 5-year LPRs for the first time in nearly a year.
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