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Reserve Bank of Australia (RBA) Governor Michele Bullock speaks at the Anika Foundation, in Sydney on Thursday. An audience Q&A session is set to follow. Key quotes It is premature to be thinking about rate cuts. As of now, board does not expect to be in a position to cut rates in the near term. Our highest priority has been and remains to bring inflation down. Board remains vigilant to upside risks to inflation. Our full employment goal is not served by letting inflation stay above target indefinitely. Substantial uncertainty around central outlook, with risks on both sides. If circumstances change, the board will respond accordingly. Labor market remains relatively tight, expected to ease gradually. Labor cost growth strong reflecting wage increases, weak productivity. Key drivers of elevated inflation are housing costs, market services. CPI rents inflation is likely to be high for some time. Market reaction The Australian Dollar (AUD) pays little heed to the dovish commentary from the RBA Chief, with AUD/USD trading sideway at around 0.6725, at the time of writing. Australian Dollar FAQs One of the most significant factors for the Australian Dollar (AUD) is the level of interest rates set by the Reserve Bank of Australia (RBA). Because Australia is a resource-rich country another key driver is the price of its biggest export, Iron Ore. The health of the Chinese economy, its largest trading partner, is a factor, as well as inflation in Australia, its growth rate and Trade Balance. Market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – is also a factor, with risk-on positive for AUD. The Reserve Bank of Australia (RBA) influences the Australian Dollar (AUD) by setting the level of interest rates that Australian banks can lend to each other. This influences the…

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Filed under: News - @ September 5, 2024 3:17 am