forex AUD/USD: RBA’s Monetary Policy in December Looks Quite Hawkish

[Anzo Lim 0]

https://jump.wikifx.com/83348CF26389B46D

According to the latest report from Reserve Bank of Australia(RBA), Australia’s annual GDP growth rate in the third quarter sits at 1.7%, in line with market expectation. RBA decided on Tuesday’s meeting to hold interest rate at 0.75% in December. Stating that rate cuts help support employment and wage growth, the central bank decided to keep interest rate unchanged in order to wait and assess the effectiveness of its policies, while emphasizing they’ll implement easing measures to sustain economic growth when necessary.

 

According to RBA, the uncertainty in domestic economy mainly comes from consumption, as weakening household income weigh down on spending. Looking ahead, RBA thinks that the Australian economy is coming to a mild turning point, The economy will eventually pick up speed and is expected to register a 3% growth by 2021.

 

In terms of the employment market, RBA estimates the jobless rate to be under 5% in 2020 and 2021; meanwhile, inflation is expected to steadily increase to near 2% in the next 2 years. Overall, the decision of RBA looks rather hawkish and signals a rally of the Australian dollar in the future.

 

 

AUD/USD daily pivot points: 0.6838---0.6844

 

 

S1  0.6821        R1 0.6869

S2  0.6794        R2 0.6888

Edited December 4, 2019 by Anzo Lim