AUD Currency Analysis
Currency Sentiment - Neutral
The Reserve Bank of Australia has communicated to the market that their forward-looking indicators suggest the markets should not prepare for a rates hike until Q4 2019. RBA Governor Lowe says board sees no strong case for near-term changes in interest rates and that next move is likely to be higher if economy evolves as expected. The bank's indicators see wage growth rising slowly and not putting enough pressure on inflation to warrant a rate hike anytime soon.
The US / China trade war continues to have a negative impact on the AUD as Australia's export-driven economy is heavily reliant on a strong Chinese economy to purchase a large majority of Australia's exports, especially commodities such as precious metals. Trumps 25% tariffs on $200bln worth of Chinese exports to the US is seen by economists as potentially destabilising China's economy, which would reduce the number of exports China buys from Australia and result in slower economic growth in Australia.