by SignalFactory · December 1, 2020 | 12:19:30 UTC
The Reserve Bank of Australia kept its official cash rate unchanged at 0.10% on Tuesday. The rate hold was widely expected following better-than-expected economic data in recent weeks. Still, the economic outlook remains fragile and susceptible to the path of Covid-19. AUD/USD gyrated to the upside, but price action may remain volatile while traders digest the RBA’s latest move.
The monetary policy statement kept the target on the 3-year Australian government bond yield unchanged at 0.10%. In line with the unchanged cash and yield target rates, no changes were announced to the RBA’s asset purchase program. For now, it appears the RBA is taking a wait-and-see approach while the path of Covid becomes clearer, particularly amid recent vaccine hopes.
The RBA statement reflects recently upbeat economic data points. Still, the central scenario forecasts GDP remaining below pre-pandemic levels until the end of 2021. Citing an “uneven and drawn out” recovery, the RBA made clear that continued monetary and fiscal support is necessary.
Indeed, monetary measures are almost certainly helping economic recovery in Australia. Today’s statement cites its recent actions to lower rates across the whole yield curve. Furthermore, year-to-date, the balance sheet has grown around A$130 billion from a combination of bond purchases and actions to support the 3-year yield target.
These actions from the RBA will likely continue until inflation and employment reach a healthy range. A sustainable inflation target within the 2-3% target range will be required for the RBA to scale back current policy support, according to today’s statement. Thus, wage growth will need to see a substantial increase from current levels. For now, according to the RBA, the cash rate will be held for at least 3 years, and the bond purchase program will remain under ongoing review.
All information on this website is of a general nature. The information is not adapted to conditions that are specific to your person or entity. The information provided can not be considered as personal, professional or legal advice or investment advice to the user.
This website and all information is intended for educational purposes only and does not give financial advice. Signal Factory is not a service to provide legal and financial advice; any information provided here is only the personal opinion of the author (not advice or financial advice in any sense, and in the sense of any act, ordinance or law of any country) and must not be used for financial activities. Signal Factory does not offer, operate or provide financial, brokerage, commercial or investment services and is not a financial advisor. Rather, Signal Factory is an educational site and a platform for exchanging Forex information. Whenever information is disclosed, whether express or implied, about profit or revenue, it is not a guarantee. No method or trading system ensures that it will generate a profit, so always remember that trade can lead to a loss. Trading responsibility, whether resulting in profits or losses, is yours and you must agree not to hold Signal Factory or other information providers that are responsible in any way whatsoever. The use of the system means that the user accepts Disclaimer and Terms of Use.
Signal Factory is not represented as a registered investment consultant or brokerage dealer nor offers to buy or sell any of the financial instruments mentioned in the service offered.
While Signal Factory believes that the content provided is accurate, there are no explicit or implied warranties of accuracy. The information provided is believed to be reliable; Signal Factory does not guarantee the accuracy or completeness of the information provided. Third parties refer to Signal Factory to provide technology and information if a third party fails, and then there is a risk that the information may be delayed or not delivered at all.
All information and comments contained on this website, including but not limited to, opinions, analyzes, news, prices, research, and general, do not constitute investment advice or an invitation to buy or sell any type of instrument. Signal Factory assumes no responsibility for any loss or damage that may result, directly or indirectly, from the use or dependence on such information.
All information contained on this web site is a personal opinion or belief of the author. None of these data is a recommendation or financial advice in any sense, also within the meaning of any commercial act or law. Writers, publishers and affiliates of Signal Factory are not responsible for your trading in any way.
The information and opinions contained in the site are provided for information only and for educational reasons, should never be considered as direct or indirect advice to open a trading account and / or invest money in Forex trading with any Forex company . Signal Factory assumes no responsibility for any decisions taken by the user to create a merchant account with any of the brokers listed on this website. Anyone who decides to set up a merchant account or use the services, free of charge or paid, to any of the Forex companies mentioned on this website, bears full responsibility for their actions.
Any institution that offers a service and is listed on this website, including forex brokers, financial companies and other institutions, is present only for informational purposes. All ratings, ratings, banners, reviews, or other information found for any of the above-mentioned institutions are provided in a strictly objective manner and according to the best possible reflection of the materials on the official website of the company.
Forex trading is potentially high risk and may not be suitable for all investors. The high level of leverage can work both for and against merchants. Before each Forex investment, you should carefully consider your goals, past experience and risk level. The opinions and data contained on this site should not be considered as suggestions or advice for the sale or purchase of currency or other instruments. Past results do not show or guarantee future results.
Neither Signal Factory nor its affiliates ensure the accuracy of the content provided on this Site. You explicitly agree that viewing, visiting or using this website is at your own risk.
