AUD recovers on RBA statement

AUD/USD popped a bit higher in Asia today as traders reacted to the latest round of the RBA’s monetary policy statement.

AUD
Source: Bloomberg

This gave a bit more colour to the RBA’s rate cut on Tuesday and saw expectations pared back around whether we can expect an immediate follow up to the February rate cut. From pricing in around a 32% chance of a March cut following the February cut, expectations dropped to 23% on the back of the statement.

While the RBA downgraded inflation and growth forecasts, it perhaps wasn’t as aggressive as the market was expecting. This suggests a wait-and-see approach is warranted. The RBA will be hoping other global forces will be enough to keep the AUD at bay in the near term, particularly as commodities continue to struggle.

AUD/USD rose to a high of $0.7859 but there is still no real conviction among the bulls. The range looks like it’ll be maintained heading into today’s non-farm payrolls data. I continue to feel any moves past $0.7900 could be used as opportunities for fresh shorts with stops placed above $0.8000.

Click to enlarge

IGA, may distribute information/research produced by its respective foreign marketing partners within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

This information/research prepared by IGA or IGA Group is intended for general circulation. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should take into account your specific investment objectives, financial situation or particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. 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. In addition to the disclaimer above, the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.

See important Research Disclaimer.