The Reserve Bank of Australia (RBA) Governor Phillip Lowe’s speech is expected to be closely eyed, in the face of intensifying pressure for the central to reduce the cash rate from the current 1% as early as next week.
The RBA, at its September 3 monetary policy meeting, left its official cash rate (OCR) at a record low of 1.00%, as widely expected. However, since the Australian labor has slackened, with an unexpected climb in the jobless rate. Meanwhile, the Australian economy expanded at the weakest pace since the global recession. Worsening domestic economic situation bolsters the case for an Oct RBA rate cut. Money markets are pricing in about an 80% chance of a cut at the Reserve Bank’s Oct. 1 meeting.
Lowe is due to deliver a speech titled “An Economic Update” at the Armidale Business Chamber Dinner, in New South Wales, at 1525 GMT. Markets will watch out for any hints on the Australian interest rates outlook in the coming months amid ongoing US-China trade war and intensifying global economic slowdown. Money markets are pricing in about an 80% chance of a cut at the Reserve Bank’s Oct. 1 meeting.
How could it impact AUD/USD?
According to Anil Panchal, Analyst at FXStreet, “Early-August high surrounding 0.6820, followed by 0.6845/50 and monthly top around 0.6900, act as nearby key resistances to watch during the pair’s further advances. In a case of a pullback, 0.6740/35, 0.6700 and August low near 0.6675 will be the key supports that hold the gate for a south-run towards 0.6600 mark.”
Key Notes
AUD/USD holds steady, below 0.6800 handle ahead of RBA Governor Lowe’s speech
AUD/USD Intraday: range
About Lowe’s speech
Philip Lowe replaced Glenn Stevens as governor of Australia’s central bank. Lowe was the Deputy Governor of the Reserve Bank of Australia, a position he held since February 2012. Usually, if he shows a hawkish outlook, that is seen as positive (or bullish) for the AUD, while a dovish is seen as negative (or bearish).
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