RBA Cannot Fail the Trend

Helen Rush,
Senior Analyst at Capital Markets

On Monday, AUD/USD lost about 50 pips. But it doesn’t mean anything, as the RBA meeting is coming.
The most important thing we need to remember is that whenever the rates go down, to local currency is to follow, and vice versa. But the RBA has no reason to lower rates further, as there is a housing bubble everybody is talking about.

Besides, there are major improvement in the labor market, and business activity. Qatar isolation is also in play, as it makes Australia one of the key players on natural gas market. And the copper keep rising as well.

The Reserve Bank of Australis should take into consideration the global trend of more hawkish stance in monetary policy. Last week the ECB, the Bank of England, and the Bank of Canada hinted on gradual removing of stimulus. In these circumstances the RBA will mostly probably remain the policy unchanged giving the market the reason to believe the easing mode is over.
And that will be enough to make Australian Dollar rise again.

AUD/USD may come back to 0,77, and may reach 0,7740 in a couple of days.