forex Trade Talk and RBA Policies Will Guild AUD/USD Trend

[Anzo Lim 0]

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The AUD is very sensitive to the international trade negotiation situation as a major commodity currency, and given Australia’s nature of an export economy, the situation can be a growing concern for the Reserve Bank of Australia(RBA). The Reserve Bank Board emphasized that they’re ready to ease the monetary policies if necessary, which means the RBA may take additional measures to cushion the impact on Australian economy.

 

According to the RBA’s latest meeting minutes, the board reviewed on November’s meeting the reasons supporting a further rate cut against a weaken global economic outlook. Meanwhile, board members noted that a faster increase of wages will be needed to keep inflation in the 2%-3% target range, indicating the RBA will remain in a quantitative easing cycle.

 

As RBA is still assessing the effectiveness of previous QE measures, whether it will hold the interest rate unchanged at the meeting on December 3rd remains a question. If international trade negotiation come to a standstill, the RBA may further cut interest rate in 2020.

Edited November 22, 2019 by Anzo Lim