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Tomorrow the RBA gets together for the last time this year to discuss policy. The overwhelming consensus is that they will keep the rate on hold. This means our attention needs to turn to the accompanying rate statement. Also, there is no press conference scheduled. This shows that if a rate cut is announced, it will be a surprise to even the Governor at this point.
What Could Move the Market
The Australian dollar could react if there is a change in the policy statement regarding a few key things. Just last week in his speech, Governor Lowe affirmed the current outlook for the bank. This is what we want to keep an ear out for when the rate decision is announced:
- That interest rates will remain low for an “extended period”
- That negative rates were “extraordinarily unlikely”; conventional policy is “still working”.
- The economy is already benefiting from low rates.
- The Board is holding rates while...
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