Lowe Sends Aussie Lower
RBA Governor Lowe spoke overnight and his comments have helped drive a wave of AUD selling over the European morning. The central bank head was answering question after his speech for the Economic Society of Australia and was found answering questions on the bank’s monetary policy and outlook.
Lowe doubled down on the bank’s message on inflation, telling reporters: “it will take a long time to get wages above 3%” and said that the bank “does not see a convincing case for a change to the CPI target”. While Lowe said the bank is “not considering negative rates” he did say that it is “likely QE will be needed in future business cycles”. When answering questions on rates, Lowe said the bank will “not raise rates to choke off housing price rises”.
In all Lowe’s comments were taken as an AUD negative with little in the way of hawkish signals. While Lowe acknowledged that the tapering announced to begin in September reflects the economic progress there, the bank maintains there is still a way to go.
Technical Views
AUDUSD
The second failure at the .7564 level has seen the Aussie turning lower again with price very close to hitting the target at .7413. With MACD and RSI bearish, there is room for a further push lower with .7339 the next level below to note. View stays bearish here unless price moves back above .7564.
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