RBA says nay to rate cuts [Video]

Support from the world’s major central banks, and the dovish expectations continue to rise this week. The People’s Bank of China (PBoC) announced more stimulus measures, the Federal Reserve (Fed) members hinted at more – and maybe big – rate cuts while the soft set of PMI data in the euro area boosted the European Central Bank (ECB) doves as well.

There is one central bank that stands out in the middle of a jungle of doves and that’s the Reserve Bank of Australia (RBA). The RBA kept its policy rate unchanged for the 7th consecutive meeting today and its Governor said that they don’t care about what the other central banks do, that they are focused on their domestic economy, that the board wants to see inflation come firmly back to 2-3% range and that they were not expecting to cut rates in the near future. Voila, that’s pretty clear.

The Aussie hit the highest level this year against the greenback on the back of the clear divergence between the RBA and the others, and supportive factors are gathering for a further Aussie strength against both the USD, EUR and the JPY.