AUD Rises, RBA Minutes Next
MarketPulse | Nov 15, 2021 06:31AM ET
The Australian dollar started the week in positive territory, extending the gains seen on Friday. AUD/USD is currently trading at 0.7364, up 0.47% on the day.h2 Markets await RBA minutes/h2
It’s a light calendar in Australia this week, with no major economic releases. The highlight from Down Under will be the RBA minutes from the November meeting, which will be released on Tuesday. The RBA didn’t adjust the cash rate or its bond-purchase program at the meeting, but did abandon its yield curve, which was an important component of its monetary policy. The central bank retreated after trying unsuccessfully to defend a 0.10% target on 3-year Australian bonds, and the Australian dollar fell sharply in response.
Given this latest drama with the RBA, the minutes could prove to be a market-mover. With core CPI rising to the bank’s target band and inflation expectations above 4%, the RBA’s message that inflation is transitory is becoming a tough sell to skeptical markets. Governor Phillip Lowe has not veered from this stance that the bank will not raise rates before 2024, but I would not be surprised if the minutes show that some bank members are in favor of an earlier date.
We continue to see a disconnect between RBA guidance and market expectations, which is certainly not an optimal situation, as it puts the RBA’s credibility at risk. The markets are much more hawkish than the RBA and have priced in several rate hikes for 2022, with the cash rate projected to approach 1.0% by the end of next year. Will the RBA stick to its guns, or will it become more hawkish? Investors will be hoping for some clarity, or at least some clues from bank policy makers in the minutes as well as at the December policy meeting.
- 0.7330 is a weak resistance line and could be tested during the day. 0.7506 is next
- There are support lines at 0.7254 and 0.7154
Original Post
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.