EUR/USD
1.16550
-0.070%
Gold
4630.46
-0.456%
Oil
84.755
0.241%
USD/JPY
159.304
0.133%
GBP/USD
1.36243
-0.044%
GBP/JPY
217.045
0.097%
Real-time News
On August 25th, the Australian dollar hovered below its 11-week high after the Reserve Bank of Australias (RBA) latest policy meeting minutes revealed that policymakers were closer to raising interest rates than the market had previously thought. The August meeting minutes showed that "several" members of the committee believed that monetary policy needed to be tightened given the upside risks to inflation, but ultimately chose to keep rates unchanged after awaiting further data. The committee specifically noted that employment, inflation, and economic growth data would be available at the next meeting, meaning that a rate hike would still be a possible option at that time. The market is currently pricing in only a 14% probability of the RBA raising the 4.35% cash rate by 25 basis points, but a 68% probability of a rate hike in December. RBA officials have repeatedly warned that inflation risks are skewed to the upside, and that interest rates could be raised again if inflation fails to fall as expected.Reserve Bank of Australia Markets Director Jacobs: The path to ample reserves is a transition from a system where the central bank determines the amount of reserves to a system where the banking system determines the amount of reserves.Reserve Bank of Australia Markets Director Jacobs: As reserves become more demand-dependent, proactive liquidity management will become more important for financial institutions.Reserve Bank of Australia Markets Director Jacobs: The goal is to establish a system that can flexibly provide any amount of cash the banking system needs, while keeping the cash rate near the Committee’s target.Gold prices retreated on Tuesday, after hitting their highest level in more than three months earlier in the session. Investors are now focused on upcoming U.S. inflation data and a speech by Federal Reserve Chairman Warsh later this week. "Looking ahead, we expect strong buying support for gold on pullbacks," said Tony Sycamore, an analyst at IG Markets. Gold prices surged last week after the U.S. Treasury announced it would double the size of its liquidity support repurchase operations for longer-term Treasury bonds and securities. This news triggered concerns about a weaker dollar. TD Securities stated, "Given that the Fed has not yet given a clear signal that it is prepared to address rising inflation, these concerns should provide strong support for gold in the coming weeks. However, given that interest rates may eventually rise in the short term as oil prices continue to climb, a significant rise in gold prices is premature."
