Australia: RBA cut delayed by strong employment - ANZ

Dhwani Mehta FXStreet

Analysts at Australia and New Zealand Banking Group (ANZ) believe that the latest strong Australian employment data has weakened the case for a Reserve Bank of Australia (RBA) next month.

Key Quotes:

“The strength in employment over November/December and the associated decline in the unemployment rate to 5.1% at the end of the year from 5.3% in October will reinforce the RBA’s view that “the Australian economy appear[s] to have reached a gentle turning point.”

This makes it difficult to see the RBA easing in February, notwithstanding the short-term hit from the bushfires and the likely downward pressure on near-term growth expectations from the weakness in consumer spending evident in the Q3 GDP data.

Accordingly, we are no longer forecasting a February rate cut. We still think further rate cuts are more likely than not over the course of 2020, however.

Continued weakness in consumer spending and soft business investment suggest that progress toward lower unemployment will stall at a level that is inconsistent with the RBA achieving its policy objectives. We are in the process of reviewing the likely timing of these future rate cuts.”

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

GBP/USD pops to three-week highs above 1.3400

GBP/USD accelerates its advance and surpasses the key 1.3400 barrier on Wednesday. That said, Cable clinches new multi-week tops on the back of the resurgence of the selling interest in the Greenback despite persistent tensions in the Middle East.

EUR/USD reverses losses, targets 1.1450

EUR/USD trades with decent gains north of the 1.1400 hurdle in the latter part of Wednesday’s NA session. The fresh offered stance in the US Dollar allowed the pair to revert the initial drop and refocus on the upside despite the hawkish tone from the FOMC Minutes and persistent geopolitical tensions.

Gold trims losses, looks at $4,100

Gold manages to regain some composure and bounce off earlier lows on Wednesday. The precious metal now shifts its focus to the $4,100 mark per troy ounce amid decent losses in the US Dollar and steady geopolitical jitters.

Dogecoin Forecast: DOGE risks sliding below $0.07 despite returning retail interest

Dogecoin (DOGE) edges lower toward support at $0.07 at the time of writing on Wednesday. The meme coin reflects a broader sell-off in the crypto market, primarily attributed to uncertainty over tensions in the Middle East. Iran launched attacks on American military bases in the Middle East on Wednesday in retaliation for attacks by the United States (US) on several places in Iran.

2.50%: Why the Kiwi's first hike in three years is a wager on a number nobody can see

The Reserve Bank of New Zealand (RBNZ) raised the Official Cash Rate (OCR) by 25 basis points to 2.50% at 02:00 GMT on Wednesday, its first hike in three years and the moment the bank that cut deeper than any G10 peer last cycle turned to face the other way.

Bye, forward guidance: How to trade when central banks choose silence

Central banks have spent years telling markets what might come next. Now, traders face the possibility that they say a lot less. From the Federal Reserve to the European Central Bank and the Bank of England, policymakers are pushing back against forward guidance.