RBA Governor Lowe’s highly anticipated speech has been released and he is maintaining the dovish guidance.

Some of the key points he has made include:

• One cut not enough to stimulate the economy
• More cuts not ‘unrealistic’
• Cuts to stimulate the economy through a lower AUD
• More needs to be done outside monetary policy

The AUD/USD has been pushing higher in recent sessions, despite the fact that the RBA minutes indicated there could be more cuts ahead. The speech has clearly weighed on the AUD (as hoped by Lowe) and is now pushing back towards where it started.

A falling USD on the back of the FOMC also indicating it will look to cuts rates has seen the Aussie and many other majors propped up to some extent today. There has been significant selling in the USD throughout the Asian session, so this will be the thing to watch going forward into the European and the US session.

Bottom Line: It looks like the odds are only increasing for a July rate cut. Watch this space as the next few months will be big for the AUD.