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6 Feb 2015
AUD/USD rises as easing concerns diminish – TradeTheNews
FXStreet (Barcelona) - The TradeTheNews Team reviews today’s RBA’s Monetary Policy Statement which sent the AUD/USD higher as market expectations for a further rate cut diminished after the central bank’s cut its inflation and GDP projections.
Key Quotes
“AUD/USD saw the most volatility with about a 60pip jump to $0.7860 following the release of Reserve Bank of Australia's quarterly policy statement.”
“Although RBA cut its projections for 2015 GDP to 2.25-3.25% v 2.5-3.5% prior and headline inflation to 2-3% v 2.5-3.5% prior, traders saw little indication of a strong easing bias beyond this week's surprise 25bp rate cut to 2.25%.”
“Most of the statement's language was also perceived as boilerplate, reiterating growth would be below trend for longer, non-mining activity remains subdued, and housing market bears watching.”
“Moreover, RBA saw oil price decline subtracting 0.5 ppt in Q1 but also forecasting subsequent improvement in consumption.”
“ANZ economists judged the quarterly statement to inflation and growth as less severe than feared, CBA report was still in favor of another 25bp move in May, while Morgan Stanley saw a more aggressive easing campaign taking OCR to 1.75% in 3 months.”
Key Quotes
“AUD/USD saw the most volatility with about a 60pip jump to $0.7860 following the release of Reserve Bank of Australia's quarterly policy statement.”
“Although RBA cut its projections for 2015 GDP to 2.25-3.25% v 2.5-3.5% prior and headline inflation to 2-3% v 2.5-3.5% prior, traders saw little indication of a strong easing bias beyond this week's surprise 25bp rate cut to 2.25%.”
“Most of the statement's language was also perceived as boilerplate, reiterating growth would be below trend for longer, non-mining activity remains subdued, and housing market bears watching.”
“Moreover, RBA saw oil price decline subtracting 0.5 ppt in Q1 but also forecasting subsequent improvement in consumption.”
“ANZ economists judged the quarterly statement to inflation and growth as less severe than feared, CBA report was still in favor of another 25bp move in May, while Morgan Stanley saw a more aggressive easing campaign taking OCR to 1.75% in 3 months.”