Goodbye king of the kangaroos
Skerdian Meta • 1 min read
Which one of you guys can spot the biggest move since yesterday evening when the London session came to an end? Not that difficult to spot an 80 pip move among a bunch of forex majors which have been dancing back and forth in 30-40 pip ranges. Yes, that´s the "crazy" Aussie being "crazy" in the Aussie land.
After two days of minimal price action, an 80 pip move can be considered crazy, right? But it wasn´t the crocs and sharks which made the AUD jump, it was the RBA (Royal bank of Australia). The RBA held their cash rate (interest rate) at 1.50%. In normal times, such an interest rate would seem pretty low, but in such conditions, an interest rate of 1.50% is considered quite high among developed countries, when half of the big central banks have gone into negative territory, burying their heads in the sand like an ostrich.
Everything is sounding Australian today. So, investing your money for a return rate of 1.50% is considered good investment nowadays, especially when your money is backed by the central banks, such as investing in Australian bonds. Hence, the search for yield in the recent months which has underpinned the Aussie and the Kiwi.
One last gift from Stevens before he leaves for good
Back to the RBA and the governor of the kangaroos Stevens. His statement this morning was sort of neutral, which means the status quo remains so no further monetary easing in the near term. That helped the forex traders relax and the AUD/USD moved higher, pulling the NZD with it. This was the very last statement from Stevens since he´s retiring. The next king of kangaroos will be Philip Lowe.