The Australian dollar has steadied after pummeling the US dollar over the past two sessions. AUD/USD is trading at 0.6729 in the European session, down 0.04% on the day at the time of writing.
RBA minutes: Rates will remain steady
The RBA minutes from the meeting earlier this month reiterated that interest rates aren’t expected to fall anytime soon. RBA members considered raising rates at the meeting but decided that the risks were better balanced by maintaining rates. The members expressed concern about the risk of higher inflation and said that a hike would have been justified if the risks to inflation had risen “materially”. The minutes stated that members considered a rate cut unlikely in the short term and that rates would likely have to remain at current levels for an “extended period”.
Governor RBA has expressed the same hawkish sentiment since the meeting, stating that it was unlikely that the central bank would lower rates in the next six months. The central bank has stuck to its “higher for longer” stance and has held the cash rate at 4.35% for seven straight times. The RBA isn’t about to change its tune, which is out of sync with the markets, which has priced in an initial rate cut in November.
China maintained its Loan Prime Rates at 3.35% for the one-year LPR and 3.85% for the five-year LRP. A month ago, China surprised the markets and lowered the LRP rates in a bid to kick-start the limping economy.
AUD/USD Technical
- There is resistance at 0.6761 and 0.6790
- 0.6706 and 0.6677 are the next support levels
