RBA’s Lowe: Done all can on rates, focus now on QE

Additional comments crossing the wires, as the Reserve Bank of Australia (RBA) Governor Phillip Lowe continues to speak at the post-monetary policy meeting press conference on Tuesday.

Victoria lockdown has cut 1 to 1.5 ppt off GDP.

But outlook for labor market required further policy action even without lockdown.

Encourages borrowers to seek lower rates from their banks.

Not much room between zero and 0.1% for cash rate.

At effective lower bound now.

Done all can on rates, focus now on QE.

Was broad consensus on policy among RBA board.

Not targeting five or 10-year yields.

Would be helpful if 10-year yields came down further.

To hold around 15% of Australian govt bonds under current plan.

If need to buy more bonds, will do so.

RBA’s latest easing is not a judgement on fiscal policy.

Other central banks have bought a lot more debt than we are planning to do.

We can effectively create money without limit.

Hope not permanently in this world of zero interest rates.

Hopes rates will rise sometime in the next five years.

Have not ruled out buying bonds outside 5 to 10-year range.

Not particularly concerned rates will push up house prices excessively.

Updated economic forecasts contain today's policy decision.

Market reaction

AUD/USD is off the lows but remains in the red below 0.7050 despite Lowe explicitly ruling out negative rates policy.

The spot was last seen trading at 0.7042, down 0.12% on the day.

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.

Feed news

Latest Forex News

Latest Forex News

Editors’ Picks

AUD/USD: Upbeat China PMIs favor bulls near fresh three month high around 0.7400

AUD/USD remains positive after China’s activity data for November flashed welcome signs. November’s China NBS Manufacturing PMI, Aussie TD Securities Inflation flashed more than expected results. Market mood stays cautious optimistic amid vaccine hopes, Brexit jitters and Aussie-China tussle.


EUR/USD: Refreshes three-month high towards 1.2000, battles triangle resistance

EUR/USD eases from fresh high since September 01. The pair rose to the highest in three months before a few hours but couldn’t cross the upper line of a five-week-old ascending triangle formation. RSI conditions warrant caution, bears are less likely to take entries above 1.1870.


NZD/USD refreshes 2.5-year high on strong China PMI above 0.7400

NZD/USD rises to the fresh high since June 2018 after China data. China’s NBS Manufacturing PMI, Non-Manufacturing PMI beat market forecasts in November. ANZ Business Confidence, Activity Outlook also came in positive for November.


Gold: Trades below 200-day MA for first since March

Gold is trading below the widely-followed 200-day Simple Moving Average (SMA) for the first time since March. The metal is changing hands near $1,783 per ounce, representing a 0.25% loss on the day. 

Gold news

Black Friday 2020 Discounts!

Learn to trade with the best! Don't miss the most experienced traders and speakers in FXStreet Premium webinars. Also if you are a Premium member you can get real-time FXS Signals and receive daily market analysis with the best forex insights!

More info