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  • AUD/USD remains on the offer despite RBA’s Lowe downplaying the need for negative rates. 
  • The central bank head said the bank will do more if needed. 
  • The RBA cut rates to a new record low of 0.15% early Tuesday. 

The bear grip around the Aussie dollar remains strong, keeping the AUD/USD pair in the red despite the Reserve Bank of Australia’s (RBA) governor Lowe saying that negative rates are ‘extraordinarily unlikely’. 

Lowe was out on the wires sharing his thoughts on the RBA’s latest decision to reduce rates to a new record low of 0.10% and the three-year bond yield target to 0.10% and the future course of action. 

Key quotes

It’s possible for RBA to increase the size of bond purchases. 

Negative rates are still extraordinarily unlikely. 

If we need to do more, we can and we will. 

So far, the markets are not impressed by Lowe’s downplaying of the need for negative rates., possibly because the central bank head stressed the bank’s willingness to do more if needed. At press time, the pair is trading near 0.7038, having dropped from 0.7063 to 0.7028 following the RBA’s rate cut announcement early today. 

The pair may recover the lost ground if the global equities gain ground as hinted by the uptick in the S&P 500 futures. However, a big rally looks unlikely, courtesy of the US election uncertainty. 

Technical levels