Connect with us

Economics

Australian Dollar Gains on Improving Sentiment, Changing Outlook for Interest Rate Cut

The Australian dollar was extremely strong on Monday, second only to the Great Britain pound. There were two likely reasons for that. The first one was the positive general market sentiment, which was favoring riskier assets. The second one was the changing outlook for the timing of an interest rate cut from the Reserve Bank of Australia. Investors were in a positive mood at the start of the week as the rally in the stock market that has started on Friday […]

Share this article:

Published

on

This article was originally published by Forex News

The Australian dollar was extremely strong on Monday, second only to the Great Britain pound. There were two likely reasons for that. The first one was the positive general market sentiment, which was favoring riskier assets. The second one was the changing outlook for the timing of an interest rate cut from the Reserve Bank of Australia.

Investors were in a positive mood at the start of the week as the rally in the stock market that has started on Friday continued into Monday. As a result, riskier growth-related currencies profited, while safer one, especially the US dollar, suffered.

But the Aussie had also its own supportive factor, specifically decreasing expectations for an interest rate cut from Australia’s central bank in the near future. Last week’s speech from RBA Deputy Governor Guy Debelle made analysts and market participants think that the central bank will act very soon. In fact, Westpac was predicting that the bank will cut interest rates to 0.1% as soon as at the next meeting on October 6. But in the newest forecast, Westpac rethought its outlook, deciding that the central bank will not announce changes to monetary policy at the same day as the government announces the budget. The reasons to expect a cut remain in place, though, and it will likely happen, just later. Now, Westpac predicts that the bank will perform the cut at the meeting on November 3.

AUD/USD rallied from 0.7029 to 0.7072 as of 21:53 GMT today. EUR/AUD dropped from 1.6525 to 1.6489. AUD/JPY rose from 74.15 to 74.60.


© NewsInspector for Forex News, 2020. |
Permalink |
No comment |
Add to
del.icio.us

Post tags: , , , , , , , ,

Feed enhanced by Better Feed from Ozh

us dollar
monetary policy

Share this article:

Economics

Markets’ High-Octane Boost If Fed Chair Powell Signals Interest Rate Rise Step Down

“Markets will be given a high-octane boost should the Federal Reserve chair support expectations that it will begin to step down from its interest rate…

Share this article:

Continue Reading
Economics

7 Stocks to Buy to Beat Next Year’s Interest Rate Blues

With the Federal Reserve committed to tackling historically high inflation through hawkish monetary policies, it’s time for investors to consider the…

Share this article:

Continue Reading
Economics

7 Excellent Dividend Stocks to Buy for the Holiday Season

With the holiday season upon us, investors may want to focus largely on dividend stocks to buy. While growth-oriented names provide the most excitement,…

Share this article:

Continue Reading

Trending