Australian Dollar Declines After RBA Lowe Keeps Rate Cut Option On Table

Date : 02/06/2019 @ 3:05AM
Source : RTTF2
Stock : Australian Dollar (B) VS United States Dollar Spot (Aud/USD) (AUDUSD)
Quote : 0.7128  -0.0001 (-0.01%) @ 12:38PM
Australian Dollar vs United Stat share price Chart

Australian Dollar Declines After RBA Lowe Keeps Rate Cut Option On Table

Australian Dollar vs United Stat (FX:AUDUSD)
Forex Chart

1 Month : From Jan 2019 to Feb 2019

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The Australian dollar lost ground against its key counterparts in the Asian session on Wednesday, after the Reserve Bank of Australia governor Philip Lowe suggested the possibility of an interest rate cut at some point, if the unemployment rate increases notably and inflation remained too low.

Speaking at the National Press Club in Sydney, Lowe remarked that the rate outlook is now more evenly balanced, with the next move to be either up or 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," Lowe told.

Lowe said that he did not see a strong case for a near-term change in the cash rate.

But the possibility of a rate cut is more likely than it used to be, if unemployment were to rise and inflation remained too low, Lowe said.

"In the event of a sustained increase in the unemployment rate and a lack of further progress towards the inflation objective, lower interest rates might be appropriate at some point," Lowe added.

The aussie declined to 0.7133 against the greenback, its weakest since January 25. The next possible support for the aussie is seen around the 0.70 level.

The aussie fell to a weekly low of 78.27 against the yen, from a high of 79.66 touched at 7:30 pm ET. The aussie is poised to target support around the 76.00 level.

After rising to 1.5744 against the euro at 7:30 pm ET, the aussie reversed direction and slipped to a weekly low of 1.5961. If the aussie drops further, 1.61 is likely seen as its next support level.

The aussie weakened to 0.9395 against the loonie, a level unseen since January 3. On the downside, the aussie is likely to locate support around the 0.92 region.

The aussie dropped to near a 5-week low of 1.0403 against the kiwi and held steady thereafter. At yesterday's close, the pair was worth 1.0487. Next key support for the aussie is seen around the 1.02 level.

Looking ahead, German construction PMI for January is due in the European session.

In the New York session, U.S. trade data for November, Canada building permits for December and Ivey PMI for January are scheduled for release.

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