RBA’s Lowe: Too early to declare victory in the battle against inflation

Anil Panchal FXStreet

“Too early to declare victory in the battle against inflation,” said Reserve Bank of Australia (RBA) Governor Philip Lowe while speaking at the Morgan Stanley Australia Summit early Wednesday in Asia.

Additional comments

June rate rise followed information suggesting greater upside risks to bank’s inflation outlook.

Some further tightening of monetary policy may be required, depending on how economy and inflation evolve.

Ambition is to navigate narrow path where inflation returns to target and economy grows.

Still possible to navigate, but it is narrow path and likely to be bumpy, risks on both sides.

Evidence indicates that higher interest rates are working and that inflation is coming down.

April CPI reading has not changed assessment inflation is trending lower.

Job at central bank is to make sure period of high inflation is only temporary; important we succeed.

Acknowledge interest rate effects felt unevenly across community, but not a reason to avoid using them.

If we had not tightened policy, the cost of living would be higher for longer.

Desire to preserve job market gains does not mean board will tolerate higher inflation persisting.

Path back to 2–3% inflation is likely to involve a couple of years of relatively slow growth.

AUD/USD remains firmer

Despite showing little reaction to the news, AUD/USD stays firmer at the highest levels in three weeks by keeping the post-RBA rally during a five-day uptrend.

Statements from Q&A Session

Get into trouble if we accept all workers need to be compensated for inflation.

Perfectly understandable for lowest paid workers to be compensated for inflation.

If inflation stays high, we are going to feel a lot of pain.

What has changed in recent months is our assessment of risks.

Following the initial speech from RBA's Lowe, the Aussie central bank Governor responds to the Question and Answers (Q&A), which in turn allowed AUD/USD a further boost towards the north.

Also read: AUD/USD bulls approach 0.6700 as RBA’s Lowe sounds hawkish, Australia GDP eyed

Author

Anil Panchal

FXStreet

Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.

EUR/USD holds losses near 1.1850 as US, China holidays keep trade muted

EUR/USD opens the week on a softer note, trading near 1.1860 during the Asian session on Monday. Activity is likely to remain muted, with United States markets closed for the Presidents’ Day holiday, while Mainland China is also shut for the week-long Lunar New Year break.

GBP/USD flat lines as traders await key UK macro data and FOMC minutes

The GBP/USD pair kicks off a new week on a subdued note and oscillates in a narrow range, just below mid-1.3600s, during the Asian session. Moreover, the mixed fundamental backdrop warrants some caution for aggressive traders as the market focus now shifts to this week's important releases from the UK and the US.

Gold remains below $5,050 despite Fed rate cut bets, uncertain geopolitical tensions

Gold edges lower after registering over 2% gains in the previous session, trading around $5,030 per troy ounce during the Asian hours on Monday. However, the non-interest-bearing Gold could further gain ground following softer January Consumer Price Index figures, which reinforced expectations that the Federal Reserve could cut rates later this year.

Week ahead: Data blitz, Fed Minutes and RBNZ decision in the spotlight

The US jobs report for January, which was delayed slightly, didn’t do the dovish Fed bets any favours, as expectations of a soft print did not materialize, confounding the raft of weak job indicators seen in the prior week.

Global inflation watch: Signs of cooling services inflation

Realized inflation landed close to expectations in January, as negative base effects weighed on the annual rates. Remaining sticky inflation is largely explained by services, while tariff-driven goods inflation remains limited even in the US.

Ripple Price Forecast: XRP potential bottom could be in sight

Ripple edges up above the intraday low of $1.35 at the time of writing on Friday amid mixed price actions across the crypto market. The remittance token failed to hold support at $1.40 the previous day, reflecting risk-off sentiment amid a decline in retail and institutional sentiment.