AUD Collapses On Potential RBA November Easing

By Staff of Admiral Markets

Access To Financial Markets Made Easy • Oct 20, 2020 at 4:33 AM EDT

The Reserve Bank of Australia has paved the way for action in its November meeting after the RBA Assistant Governor, Christopher Kent, said there is a need for a supportive policy for some time to come.

The Reserve Bank of Australia has paved the way for action in its November meeting after the RBA Assistant Governor, Christopher Kent, said there is a need for a supportive policy for some time to come. In its latest Monetary Policy Meeting Minutes report, the bank highlighted that the strength of the Australian dollar and the drag on the economy from Victoria's lockdown support the case for more easing.

AUD collapses on potential RBA November easing

Economists believe that this easing will take place via an interest cut from 0.25 per cent to 0.1 per cent, as well as a commitment for large scale bond purchases in additional quantitative easing measures. In a speech last week, the RBA Governor Philip Lowe signalled that interest rates would stay low for at least three years.

The Australian dollar fell significantly on the news and was down against all other major G7 currencies, apart from the New Zealand dollar. The AUDUSD exchange rate rose nearly 35% higher from its March low to its September high. It is now around 5% lower from its September high as traders prepare for an interest rate cut.

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