Article Highlights

  • RBA’s Lowe: It’s “reasonable” to expect constant interest rates throughout the year
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Ho hum. It was a directionless trading session for forex traders, as a lack of fresh catalysts inspired market players to cherry pick their positions.

Major Events:

RBA’s Lowe gives another speech – The Reserve Bank of Australia (RBA) top boss is at it again! In his discussion with the parliament’s standing Committee on Economics, Lowe supported speculations that the central bank is done easing for a while.

Apparently, he and his gang aren’t too interested in boosting employment in the short-term but making households more vulnerable in the medium term. See, they believe that further cuts could push household debt to “dangerous levels.” Unlike most central banks that only target employment and inflation numbers, the RBA has a mandate to ensure “the general welfare of the Australian people.”

Lowe even asked:

“Household debt is at record levels. Is it really in the national interest to get a little bit more employment in the short term at the expense of encouraging that fragility?”

For now, Lowe says it’s “reasonable” for markets to price in constant interest rates throughout the year even though “there are clearly scenarios where they’d go up and there are scenarios where they’d go down.” He then capped it with “I think it would be good if people focused on other things rather than quarter percent movements in interest rates.”

Slight dip in Asian equities – With not a lot of fresh catalysts in the markets, Asian session traders took some profits ahead of the weekend.

Of course, it also didn’t help that U.S. Treasury Secretary Steven Mnuchin downplayed the government’s ability to reach a 4% GDP growth and hinted that we won’t see any significant tax and deregulation-related changes until 2018. This comes after Trump has promised “phenomenal” tax plans a few weeks ago.

In any case, Nikkei slipped by 0.16%, Hang Seng dipped by 0.41%, the Shanghai index fell by 0.30%, and Australia’s A SX 200 dropped by 0.71%.

Market Movers:

AUD – With Philip Lowe all but saying that rate cuts are out of the table this year, the Aussie managed to sneak in a pip or two from its counterparts.

AUD/USD is back at .7715 after dipping to .7699, AUD/NZD is up to 1.0686 after falling to 1.0660, and AUD/JPY capped the session at 86.99 after slipping to 86.88.

JPY – Yen bulls took a breather from their cause, as the common currency took hits across the board.

GBP/JPY is up by 11 pips (+0.08%) to 141.49, EUR/JPY is up by 7 pips (+0.06%) to 119.28, and CAD/JPY is up by 7 pips (+0.08%) to 86.06.

Watch Out For:

  • 10:30 am GMT U.K. BBA mortgage approvals (41.9K expected, 43.2K previous)

See also:

U.S. Session Recap
London Session Recap

Bonnie and Clyde, peanut butter and jelly, Kanye West and Kanye West. Some things just go well together.

In forex trading, you get better odds at securing pips when your fundamental analysis is complemented by technical analysis.

Head on to Big Pippin’s Daily Chart Art for some pip-locking technical setups!