Australian Dollar Gains as RBA Leaves Rate at 3.00%, Strikes Clear Neutral Tone
The Australian dollar and New Zealand dollar benefited from continued risk appetite, as the currencies finished the day up against the rest of the majors. On an intraday basis, the Australian dollar fell throughout the European trading session, but subsequently recouped losses during US trading. This was interesting because the Reserve Bank of Australian announced at 00:30 ET that they had left their cash rate target at 3.00 percent and shifted their bias from being slightly dovish to decidedly neutral. Indeed, RBA Governor Glenn Stevens dropped a line in his policy statement that said that "the outlook for inflation allows some scope for further easing of monetary policy," suggesting that they have no intention of cutting rates any further. Accordingly, Credit Suisse overnight index swaps have shifted to price in 152 basis points worth of RBA rate hikes during the next 12 months, compared to 137 basis points on Monday and 43 basis points one month ago.
Related Article: Australian Dollar Weekly Trading Forecast
Read the entire day's economic developments at Daily Fundamentals.
- Australian Dollar Up as RBA Stevens Says Interest Rate Have 'Probably' Bottomed
- Australian Dollar May Show a Limited Reaction to RBA Rate Decision Overnight
- Australian Dollar Could Rally for Test of 0.85 If RBA Leaves Rates at 3.00%, Signals Hawkish Bias
- Australian Dollar Gaining Steam Ahead of Tuesday's RBA Rate Decision
- Euro Mostly Higher as Services PMI Signals Expansion for First Time Since May 2008