Will The RBA Confirm Two More Cuts For 2020?

Another important week for the Aussie Dollar with tier one data and the RBA’s December Monetary Policy Meeting.
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Another important week for the Aussie Dollar with tier one data and the RBA’s December Monetary Policy Meeting.

RBA Governor Lowe has caused some investment banks to price in two more rate cuts by the bank in 2020. This came as a result from a speech this week where the Governor stated that the Effective Lower Bound for the cash rate is 0.25%.

Prior to his speech, expectations were that the lower bound was 0.50%, which is why markets only priced in one more cut in 2020 to take the current interest rate from 0.75% to 0.50%.

This week markets will be keen to find out whether the RBA confirms that they are expecting two more cut in 2020. The latest comments about wages, inflation and QE will also be in focus.

Apart from the RBA meeting, we also have important data points on Monday that feed into the Q3 GDP numbers which is due on Thursday (the day after the RBA), and we also have the ongoing trade uncertainty expected to move the currency.

This week ahead video will help you prepare for these upcoming events and provide insights into how you could possible trade them.

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Highlights of the video:

01:02 – Baseline context for the AUD

02:56 – Baseline expectations for the upcoming risk event

04:29 – Possible sentiment shifts

08:14 – Possible currency pairs to consider

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