The words of the Reserve Bank of Australia Governor that have followed the releasing of the Minutes have stopped a possible bounce of the Australian dollar. Below, you can read the end of his speech.
"The Reserve Bank Board recognises that monetary policy has a role to play here. Earlier today, we released the minutes of the Board's meeting two weeks ago. At that meeting, we discussed a scenario in which there was no further improvement in the labour market, and the unemployment rate remained around the 5 per cent mark.
In this scenario, we judged that inflation was likely to remain low relative to the target and that a decrease in the cash rate would likely be appropriate. A lower cash rate would support employment growth and bring forward the time when inflation is consistent with the target. Given this assessment, at our meeting in two weeks' time, we will consider the case for lower interest rates."
Thus, a rate cut is highly likely at the next meeting on June 4th. But the focus will be on the outlook for further easing, with another 25bp cut which could happen in the last months of the year.
Aud-Usd has started to fall again. Today's news that the US has granted Huawei a license to buy US goods until August 19 has had a very brief effect.
In the weekly chart, we can see how from September 2018 Aud-Usd moves within a bearish channel. The next two supports are at 0.84300 and 0.83450.
An eventual rebound in the coming days (many indicators are oversold), should be used to open bearish positions.
"The Reserve Bank Board recognises that monetary policy has a role to play here. Earlier today, we released the minutes of the Board's meeting two weeks ago. At that meeting, we discussed a scenario in which there was no further improvement in the labour market, and the unemployment rate remained around the 5 per cent mark.
In this scenario, we judged that inflation was likely to remain low relative to the target and that a decrease in the cash rate would likely be appropriate. A lower cash rate would support employment growth and bring forward the time when inflation is consistent with the target. Given this assessment, at our meeting in two weeks' time, we will consider the case for lower interest rates."
Thus, a rate cut is highly likely at the next meeting on June 4th. But the focus will be on the outlook for further easing, with another 25bp cut which could happen in the last months of the year.
Aud-Usd has started to fall again. Today's news that the US has granted Huawei a license to buy US goods until August 19 has had a very brief effect.
In the weekly chart, we can see how from September 2018 Aud-Usd moves within a bearish channel. The next two supports are at 0.84300 and 0.83450.
An eventual rebound in the coming days (many indicators are oversold), should be used to open bearish positions.