Aussie shrugs after RBA says no rush to ease

Kenny Fisher MarketPulse

The Australian dollar is showing limited movement on Tuesday. In the European session, AUD/USD is trading at 0.6501, down 0.14% on the day. The Aussie flew out of the gates on Monday, climbing 0.75%.

RBA minutes: No rush to cut rates

The Reserve Bank of Australia has maintained its cash rate at 4.35% over the past year, making it an outlier among other major central banks that are in the midst of a rate-cutting cycle. The RBA released the minutes of the meeting earlier this month, which indicated that policymakers are not in any rush to lower rates.

The minutes stated that the Board considered underlying inflation to be “too high” and it did not expect inflation to return sustainably to the 2%-3% target range until 2026. The Board remained “viligant to the upside risks of inflation” and that “it was not possible to rule anything in or out in relation to future changes in the cash rate target”. That is a long way of saying that the Bank has not ruled out rate cuts or hikes.

The minutes reiterated that the Board’s highest priority is returning inflation to target. Given that the Board stated that inflation remains too high and goods inflation is expected to rise, the message from the minutes is that a rate cut is not imminent. The minutes served as a message to the markets that the RBA is willing to maintain rates unless inflation falls unexpectedly. The RBA meets next on Dec. 10 and is expected to hold rates.

AUD/USD technical

AUD/USD tested support at 0.6489 earlier. Below, there is support at 0.6467.
0.6530 and 0.6552 are the next resistance lines.

Author

Kenny Fisher

MarketPulse

A highly experienced financial market analyst with a focus on fundamental analysis, Kenneth Fisher’s daily commentary covers a broad range of markets including forex, equities and commodities.

EUR/USD: US Dollar to remain pressured until uncertainty fog dissipates

Unimpressive European Central Bank left monetary policy unchanged for the fifth consecutive meeting. The United States first-tier employment and inflation data is scheduled for the second week of February. EUR/USD battles to remain afloat above 1.1800, sellers moving to the sidelines.

GBP/USD reclaims 1.3600 and above

GBP/USD reverses two straight days of losses, surpassing the key 1.3600 yardstick on Friday. Cable’s rebound comes as the Greenback slips away from two-week highs in response to some profit-taking mood and speculation of Fed rate cuts. In addition, hawkish comments from the BoE’s Pill are also collaborating with the quid’s improvement.

Gold: Volatility persists in commodity space

After losing more than 8% to end the previous week, Gold remained under heavy selling pressure on Monday and dropped toward $4,400. Although XAU/USD staged a decisive rebound afterward, it failed to stabilize above $5,000. The US economic calendar will feature Nonfarm Payrolls and Consumer Price Index data for January, which could influence the market pricing of the Federal Reserve’s policy outlook and impact Gold’s performance.

Crypto Today: Bitcoin, Ethereum, XRP rebound amid risk-off, $2.6 billion liquidation wave

US NFP and CPI data awaited after Warsh’s nomination as Fed chief. Yen traders lock gaze on Sunday’s snap election. UK and Eurozone Q4 GDP data also on the agenda. China CPI and PPI could reveal more weakness in domestic demand.

Three scenarios for Japanese Yen ahead of snap election

The latest polls point to a dominant win for the ruling bloc at the upcoming Japanese snap election. The larger Sanae Takaichi’s mandate, the more investors fear faster implementation of tax cuts and spending plans.

XRP rally extends as modest ETF inflows support recovery

Ripple is accelerating its recovery, trading above $1.36 at the time of writing on Friday, as investors adjust their positions following a turbulent week in the broader crypto market. The remittance token is up over 21% from its intraday low of $1.12.