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RBA’s Bullock says no rate cuts coming, Aussie soars

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The Australian dollar has started the week with slight gains. AUD/USD is trading at 0.6685 in the European session, up 0.24% on the day at the time of writing. Earlier today, the Australian dollar rose as high as 0.6694, marking a one-month high.

Will RBA minutes shake up the Aussie?

Hawkish remarks from Reserve Bank of Australia’s Governor Bullock sent the Aussie flying on Friday. Bullock reiterated that there would be no interest rate cuts in the “near term”. Bullock used the same language after the meeting on August 6 and when she clarified that this meant a period of at least six months, the Australian dollar responded with strong gains. The RBA statement at the meeting expressed the Bank’s frustration that inflation remains too high and is coming down slower than the central bank had expected.

Will we gain any insights from Tuesday’s RBA minutes release? The minutes will indicate that the Board discussed the possibility of a rate hike, but that isn’t really news since the Board did the same thing at the previous two meetings. If the minutes show that the RBA has little appetite for a rate cut, that could send the Australian dollar lower as the markets are at odds with Bullock’s hawkish message.

The markets have fully priced in a rate cut of 25 basis points in November and expect further cuts early in 2025. The rate statement noted that inflation remained too high and was coming down slower than expected.

China will announce its loan prime rates (LPR) on early Tuesday. A month ago, China’s central bank surprised the markets and lowered the rates for the one-year and five-year LPRs for the first time in close to a year. The central bank is expected to maintain the one-year LPR at 3.35% and the five-year loan rate at 3.85%.

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AUD/USD Technical

  • AUD/USD is testing resistance at 0.6691. Close by, there is resistance at 0.6713
  • 0.6650 and 0.6628 are the next support levels

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Kenny Fisher

Kenny Fisher

Market Analyst at OANDA
A highly experienced financial market analyst with a focus on fundamental and macroeconomic analysis, Kenny Fisher’s daily commentary covers a broad range of markets including forex, equities and commodities. His work has been published in major online financial publications including Investing.com, Seeking Alpha and FXStreet. Kenny has been a MarketPulse contributor since 2012.
Kenny Fisher

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