More RBA Gov Lowe says Bank closer to normal rate setting

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More from Governor Lowe of the Reserve Bank of Australia, testifying in parliament today:

  • Australia in a much better position than the Fed as wages are still contained
  • The outlook for the global economy is very weak
  • Closer to normal fare setting
  • The next board meeting will consider whether to increase by 25 bps or 50 bps
  • At some point, it will not be necessary to increase by 50 basis points, approaching this point
  • Australian economic data suggests the economy is doing very well
  • Wouldn’t be surprised if house prices fell 10% from their peak

Earlier:

Lowe’s additional remarks still don’t provide much clarity on whether the rate hike at the October 4 Bank meeting will be 25 bps or 50 bps. Indeed, Lowe specifically says that this issue needs to be considered at the meeting.

Reading between the lines, I’d throw in a 25 based on those remarks. Others might disagree though.

aud

USD

The Australian dollar (AUD) is the official currency of Australia, which is also used on Christmas Island, the Cocos (Keeling) Islands, Norfolk Island, as well as in the independent states of the Pacific. Introduced in 1966, the AUD is currently the fifth most traded currency. in the world, behind only the US dollar, the euro, the Japanese yen and the British pound. The currency is very important for the foreign exchange markets and is regularly used as a carry trade against other majors. The Reserve Bank of Australia (RBA) is the central banking authority responsible for managing and issuing banknotes in AUD. What factors affect the AUD? The AUD is more sensitive than other currencies to macroeconomic factors. Overall, monetary policy is the main driver of the currency, including interest rate differentials. Beyond Australia, the prices of commodities such as precious metals and others are also important to the AUD and can cause its value to fluctuate against other currencies. Global risk sentiment and confidence are also indicators that are closely watched given their correlation with the AUD. This is because the AUD is considered a base currency and also used as one of the most popular indicators of growth and risk in global financial markets. the mood of the global market is likely to drive the AUD higher, while if there is prevailing pessimism, the AUD will often fall. Domestically, government credit ratings can also impact the AUD. Australia’s credit rating influences its debt risk profile. This trend directly influences the cost the government has to pay on the debt it owes.

The Australian dollar (AUD) is the official currency of Australia, which is also used on Christmas Island, the Cocos (Keeling) Islands, Norfolk Island, as well as in the independent states of the Pacific. Introduced in 1966, the AUD is currently the fifth most traded currency. in the world, behind only the US dollar, the euro, the Japanese yen and the British pound. The currency is very important for the foreign exchange markets and is regularly used as a carry trade against other majors. The Reserve Bank of Australia (RBA) is the central banking authority responsible for managing and issuing banknotes in AUD. What factors affect the AUD? The AUD is more sensitive than other currencies to macroeconomic factors. Overall, monetary policy is the main driver of the currency, including interest rate differentials. Beyond Australia, the prices of commodities such as precious metals and others are also important to the AUD and can cause its value to fluctuate against other currencies. Global risk sentiment and confidence are also indicators that are closely watched given their correlation with the AUD. This is because the AUD is considered a base currency and also used as one of the most popular indicators of growth and risk in global financial markets. the mood of the global market is likely to drive the AUD higher, while if there is prevailing pessimism, the AUD will often fall. Domestically, government credit ratings can also impact the AUD. Australia’s credit rating influences its debt risk profile. This trend directly influences the cost the government has to pay on the debt it owes.
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