What Will the RBA Have to Say This Week?
For Aussie bulls, it was a week they would most likely forget. Over the course of the previous five trading days, the Aussie has taken a battering and itโs been predominately on the back of weaker than expected fundamentals.
Of course, there is some softness thanks to the doubt in the air surrounding the US-China trade talks, but it looks like the current move is really all centred on the RBA.
Last week we saw a soft jobs number that really hurt the RBAโs plan. They wanted to see a falling jobless rate. Instead, we got a big miss in the number of jobs created. To the point, there was a contraction.
At the same time, there was some soft Chinese data that indicates that we are still seeing some weakness there as well and those two factors alone are troubling.
That meant that the RBAโs previous focus of getting the jobless rate under 5%, is now a little more unlikely. And what than means is that while Governor Lowe, had previously indicated he would be slowing down the easing, these recent numbers indicate that things might not be as good as many had hoped.
The RBA minutes, due for release this week, will also likely now be out of date. At the previous meeting, where rates were held steady, Lowe was more hawkish. Now, he surely canโt be.
The odds of another rate cut in February are now on the rise. And this week, the RBAโs Kent will be speaking, in what will be a somewhat anticipated event. We all want to know what the board is now thinking and what the next move might be.
The AUD/USD is already tumbling and has somewhat recovered above 0.6800. But if there is any more dovish talk, we have to assume that 0.6800 will drop and a run at the lows of 0.6700 will remain a real possibility.
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