CFDs are a leveraged product and can result in losses that exceed deposits. Please ensure you fully understand how CFDs work and what their risks are, and take care to manage your exposure. CFDs are a leveraged product and can result in losses that exceed deposits. Please ensure you fully understand how CFDs work and what their risks are, and take care to manage your exposure.

Reserve bank of Australia indicate interest rates will be kept on hold in near term

The Reserve Bank of Australia (RBA) at its April board meeting have said a cut in interest rates would be “appropriate” should inflation stay low, with no strong case for a move.

Policy makers believe a cut would be in the works should inflation stay low and unemployment trend higher, saying the effect on an even lower cash rate on the economy could be smaller than in the past.

"Nevertheless, a lower level of interest rates could still be expected to support the economy through a depreciation of the exchange rate and by reducing required interest payments on borrowing, freeing up cash for other expenditure," minutes of the meeting showed on Tuesday.

The board concluded "there was not a strong case for a near-term adjustment in monetary policy."

Australian dollar price

AUD/USD eased after the RBA minutes showed a more dovish tone.

AUD/USD edging below $0.7160 upon the release.

IG market analyst Kyle Rodda said, the Aussie dollar has fallen somewhat following the minutes, however, remains much higher than what it was a fortnight ago when the RBA met.

Financial markets are pricing in a 25-basis-point cut by the end of this year and another cut in 2020.

Low chance of cash rate increase

RBA board members said, ‘Members agreed that the likelihood of a scenario where the cash rate would need to be increased in the near-term was low.’ However, RBA members said there was a small chance of a hike given subdued inflation.

IG market analyst, Kyle Rodda said the RBA’s minutes probably proved market participants’ general suspicions correct: that the central bank has edged slightly closer to an easing bias.

‘The RBA haven’t gone all-in yet on the dovish rhetoric, like some other major central banks. The minutes showed that the board discussed “scenarios” where rates might need to be cut; however, concluded the current circumstances wouldn’t warrant such an action.’ Mr. Rodda said.

RBA members expect inflation to remain at just under 2% for some time, while annual wage growth in Australia is only slightly higher at 2.3%


This information has been prepared by IG, a trading name of IG Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
CFDs are a leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your initial deposit, so please ensure that you fully understand the risks involved.

Start trading forex today

Find opportunity on the world’s most-traded – and most-volatile – financial market

  • Trade spreads from just 0.6 points on EUR/USD
  • Analyse with clear, fast charts
  • Speculate wherever you are with our intuitive mobile apps

See an FX opportunity?

Try a risk-free trade in your demo account, and see whether you’re onto something.

  • Log in to your demo
  • Try a risk-free trade
  • See whether your hunch pays off

See an FX opportunity?

Don’t miss your chance – upgrade to a live account to take advantage.

  • Get spreads from just 0.6 points on popular pairs
  • Analyse and deal seamlessly on fast, intuitive charts
  • See and react to breaking news in-platform

See an FX opportunity?

Don’t miss your chance. Log in to take your position.

Live prices on most popular markets

  • Forex
  • Shares
  • Indices
liveprices.javascriptrequired
liveprices.javascriptrequired
liveprices.javascriptrequired

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

Plan your trading week

Get the week’s market-moving news sent directly to your inbox every Friday. The Week Ahead gives you a full calendar of upcoming economic events, as well as commentary from our expert analysts on the key markets to watch.

For more info on how we might use your data, see our privacy notice and access policy and privacy webpage.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.