Early week comments from the RBA boss gave the Aussie a positive start, and the bulls didn’t seem to look back as expectations of global central bank easing helped support risk-on sentiment.
Australian Headlines and Economic data
- RBA’s Lowe Sees Weaker Boost to Growth If ‘Everyone Is Easing’ – Based on the bullish bump in AUD pairs around these comments, traders seemed to have taken Lowe’s comments as a signal that the probability of a rate cut has taken a step back.
- Early Asia session weakness in Aussie pairs may have stemmed from a rise in global risk aversion sentiment as Middle East tensions continued to rise between the U.S. and Iran.
- The Australian dollar broadly swung to the upside during the afternoon U.S. session, most likely sparked by comments from Fed officials (Bullard calls for ‘insurance’ cut, Fed stronger case for accommodation) strengthening speculation of a rate cut very soon, even if it’s not likely the 50 bps cut investors were looking for. Global risk sentiment turned toward the positive which help higher-yielding currencies like the Aussie.