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Aussie Sinks After RBA Chief Hints at Possibility of Interest Rate Cut

February 6, 2019 at 12:03 by Vladimir Vyun

Banjo Paterson on Australian 10-dollar billThe Australian dollar slumped today, erasing yesterday’s gains, after Philip Lowe, Reserve Bank of Australia Governor, mentioned in his speech that an interest rate cut is as likely as a hike.

Previously, the RBA was saying that the next move in rates is more likely to be a hike, and yesterday’s monetary policy statement seemed to confirm this. Yet today, Governor Lowe contradicted that in his speech titled “The Year Ahead,” saying:

Looking forward, there are scenarios where the next move in the cash rate is up and other scenarios where it is down. Over the past year, the next-move-is-up scenarios were more likely than the next-move-is-down scenarios. Today, the probabilities appear to be more evenly balanced.

AUD/USD plunged from 0.7232 to 0.7131 as of 11:51 GMT today. EUR/AUD jumped from 1.5756 to 1.5962.

If you have any questions, comments, or opinions regarding the Australian Dollar, feel free to post them using the commentary form below.

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