Australian economy: Is the central bank really thinking of lowering interest rates?
The Australian Reserve Bank did not change the interest rate of 1.50%. This is the lowest interest rate in Australia history. However, the statement of Australia Reserve bank monetary policy showed that the central bank was not in a hurry to raise interest rates. The bank is more concerned about the high value of Australian dollars on global markets. Last week, weak reports from Australia were released, indicating a decline in the August retail index.also, A member of the Australian Reserve Bank said that if the consumer expenditures condition deteriorates, the central bank will have to decrease the interest rates.
although Harper’s comment, a member of the Australia Central Bank, about the possibility of lowering interest rates is important, it should be noted that no central bank will change monetary policy just based on a weak economic report. Also, other Australian reserve banks believe that current market interest rate sentiments are reasonable. The market expects to happen the next step to raise interest rates in 2018. however, the market is still expecting the Federal Reserve policies to be intensified and be a force for the Australian dollar.
There will also be realized no major economic report this week that could affect the country’s interest rates. Australian Consumer index and Business Trust will be released this week. In contrast, the US retail index and the latest Federal Reserve Monetary Report will be published. It is expected that these reports will have a temporary impact on the market. Accordingly, the AUDUSD trend is expected to continue to decline, even though the recent downtrend has been expanded more than usual. It might be better for traders to pay attention to the ideas of Australia Reserve Bank officials. In the current situation, it seems that the views of the Australia Central Bank officials do not have a positive impact on the Australian dollar.