RBA's Lowe: Rate outlook more evenly balanced, hike next year may be appropriate

Omkar Godbole FXStreet Contributor

While the probability of interest rates going up or down is broadly balanced, a hike next year may be appropriate, Reserve Bank of Australia Governor Philip Lowe said on Friday while testifying before the House of Representatives' Standing Committee on Economics, in Sydney.

The central bank head shifted to a neutral policy outlook on Feb. 6 by putting rate cuts back on the table.

Key quotes

Would be concerned if inflation stays below 2-3% band.

Unlikely rates would go up this year.

Don't have a crystal ball on rates.

Author

Omkar Godbole

FXStreet Contributor

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

GBP/USD clings to moderate gains near 1.3400

GBP/USD enters a consolidation phase near 1.3400 after closing in positive territory on Tuesday. Weaker-than-expected June CPI readings from the US make it difficult for the US Dollar to gather strength and allow the pair to stay afloat. Fed Chair Warsh's second day of congressional testminoy and US producer inflation data could ramp up the market volatility in the American session.

EUR/USD holds steady above 1.1400 ahead of US data

EUR/USD stabilizes following Tuesday's rebound and trades in a narrow channel above 1.1400. The US Dollar (USD) struggles to stay resilient against its rivals following the soft inflation data but escalating tensions in the Middle East limit the pair's upside for now. Later in the day, June producer inflation data from the US will be watched closely by market participants.

Gold struggles to build on Tuesday's gains, retreats toward $4,000

After rising more than 1% on Tuesday, Gold loses its traction midweek and declines toward $4,000. While the USD stays on the back foot following the soft June inflation data, escalating tensions in the Middle East causes XAU/USD to stretch lower. Markets await PPI data from the US, while keeping a close eye on headlines surrounding the US-Iran conflict.

Bitcoin, Ethereum, and Ripple show tentative recovery as key technical levels hold

Bitcoin, Ethereum and Ripple trade with a mild positive bias on Wednesday as sentiment improves across the cryptocurrency market. BTC is testing its 50-day Exponential Moving Average, ETH has broken above a key resistance level at $1,800, while XRP has found support around a key level.

2% and nothing else: Why Warsh gave Congress three hours of Greenspan

The Federal Reserve Chair who wants the institution to say less spent Tuesday legally required to say more, on the one morning the data handed him something pleasant to say. June's Consumer Price Index fell 0.4% on the month, the steepest single-month decline since April 2020.

-0.4%: Why the biggest CPI drop since 2020 couldn't buy back a single cut

The June CPI fell 0.4% on the month, the largest one-month decline since April 2020, dragging the annual rate to 3.5% from May's 4.2% and snapping a three-month acceleration streak. Core prices went nowhere, flat on the month and down to 2.6% YoY, both under consensus.