AUD/USD down 0.3% to 0.7342 currently
His remarks earlier weren’t anything new but they just reaffirmed the more dovish sentiment when it comes to RBA policy at the moment, as compared to other major central banks which are at least taking more progressive steps in normalising policy.
There was also an attempt to jawbone the currency and market pricing, as Lowe mentioned that it is “difficult to understand” why market participants are pricing in any potential rate hikes for 2022 and 2023.
That seems to be doing the trick at least with the aussie weighed lower on the day so far.
AUD/USD is keeping pressured below its key hourly moving averages, with sellers defending the 100-hour moving average (red line) to start the week.
Keep below that and the near-term bias remains more bearish with eyes on support at the 38.2 retracement level at 0.7336.
Considering that AUD/USD may still also face some added volatility from the dollar side of the equation, I’d argue that a more straightforward divergence play lies with AUD/NZD.
The pair is down slightly again today near the lows for the year and with the RBNZ looking potentially for a 50 bps rate hike next month, it could pave the way for further downside pressure in the weeks to come. Parity anyone?
