The Australian dollar is in a mild retracement phase after a nearly two month run-up.
The calendar for Australia is light until the Nov 5 RBA decision but a hint about what’s to come when RBA Governor Stevens speaks in Sydney at a investment conference at 2230 GMT (6:30 pm ET). The speech is embargoed for media so there is the potential for market-moving information although there won’t be a Q&A.
The RBA has been the main driver of the Australian dollar this year. AUD/USD bottomed for the year at 0.8848 on the day before the RBA rate cut to 2.50%. Since then, the central bank has shifted to a neutral stance in its statement.
At today’s meeting, the Board judged that the setting of monetary policy remained appropriate. The Board will continue to assess the outlook and adjust policy as needed to foster sustainable growth in demand and inflation outcomes consistent with the target.
Previously the Stevens had said there was “some scope to ease policy further.” AUD/USD had rallied more than 800 pips since the bottom but it’s pared gains in the past week after a bearish technical signal.
Stevens has taken to jawboning against AUD/USD strength but to little avail. The thing about jawboning is that it tends to work best when you’re swimming with the current. The recent uptrend in AUD/USD has broken and harsh words from Stevens about the Aussie dollar could fall on sympathetic ears.
AUDUSD daily
