RBA: Wage growth likely to remain low for a while

Omkar Godbole FXStreet Contributor

The Reserve Bank of Australia (RBA) is expecting a gradual decline in unemployment to 5 percent over the next couple of years, according to the October policy statement. However, the central bank does not see the labor market tightening translating into wage price inflation for a while.

Key points (Source: Reuters)

Low rates supporting economy
Progress on unemployment, inflation expected to be gradual
GDP growth to average a bit above 3 pct in 2018, 2019
Business conditions are positive
Housing markets have slowed in Sydney, Melbourne
Public infrastructure investment supporting economy
Household consumption a source of uncertainty
Outlook for labour market remains positive
Credit conditions tighter than they have been for some time
Expects inflation to be higher in 2019, 2020
Further gradual decline in unemployment expected over the next couple of years to 5 percent
Wage growth remains low, likely to continue for a while
AUD remains in range of past couple of years
AUD has fallen against US dollar, along with most other currencies
Drought has led to difficult conditions in farm sector

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

EUR/USD climbs above 1.1600 as markets cheer US-Iran deal

EUR/USD gathers bullish momentum and trades above 1.1600 on Monday. The US and Iran have reached a deal to reopen the Strait of Hormuz on Sunday, which underpins risk sentiment, supporting the Euro against the US Dollar. Now, the main focus this week remains on the Fed policy decision due on Wednesday.

GBP/USD retreats from 10-day high, holds above 1.3200

GBP/USD pulls away from the 10-day high it touched above 1.3460 but manages to stay in positive territory above 1.3400. The positive shift seen in risk mood following news of the US and Iran reaching a framework agreement to end the conflict and reopen the Strait of Hormuz helps the pair hold its ground.

Gold rallies beyond $4,300 as geopolitical tensions ease

Gold rises sharply on Monday and trades well above $4,300, gaining nearly 3% on the day. The precious metal gathers bullish momentum after the United States and Iran had reached a deal to end their conflict, easing concerns about inflation and higher interest rates.

Bitcoin consolidates gains, Ethereum defends support, XRP nears breakout trigger

Bitcoin, Ethereum and Ripple begin the week on a constructive note as the top three cryptocurrencies attempt to extend rebounds after recovering nearly 4%, 2% and 2.6%, respectively. BTC steadies around $65,600, ETH continues to hold firmly above the key $1,700 support, while XRP nears the upper boundary of the falling channel pattern.

President Trump announced that the deal with Iran is complete

President Trump announced that the deal with Iran is complete and he authorises the toll-free opening of the Strait of Hormuz and removal of the US Naval blockade. While the agreement is made, it is expected to be signed on Friday to take effect. The Forex market looks stable and could react slowly to the positivity around the news as Iran still expresses its mistrust on the US.

4.2% headline, 0.2% core: Why the Fed's next hike may be targeting the wrong problem

May's CPI put headline inflation at 4.2% on the year, up from 3.8% in April and the hottest reading since April 2023, while core prices rose just 0.2% on the month, undershooting the 0.3% consensus and halving April's pace.