Select Language

RBA's Bullock: Believe rates need to stay restrictive for time being

blockHeadVisual
  1. HOME
  2. Get information
  3. World FX news
  4. RBA's Bullock: Believe rates need to stay restrictive for time being

World FX news

search
Breaking news

RBA's Bullock: Believe rates need to stay restrictive for time being

  • X
  • facebook
  • LINE
  • RSS
  • X
  • facebook
  • LINE
  • RSS
New update 2024.11.05 13:36
RBA's Bullock: Believe rates need to stay restrictive for time being

update 2024.11.05 13:36

Reserve Bank of Australia (RBA) Governor Michele Bullock is speaking at the press conference, following the announcement of the November monetary policy decision on Tuesday.

Bullock is responding to questions from the media, as part of a new reporting format for the central bank starting this year.

The RBA maintained the benchmark interest rate at 4.35% for the eighth straight meeting earlier this Tuesday.

Key quotes

Believe rates need to stay restrictive for time being.

Think there are still risks on upside for inflation.

 

developing story ...

Market reaction

AUD/USD is holding gains near 0.6600 on the above comments, up 0.11% on the day, as of writing.

Australian Dollar FAQs

One of the most significant factors for the Australian Dollar (AUD) is the level of interest rates set by the Reserve Bank of Australia (RBA). Because Australia is a resource-rich country another key driver is the price of its biggest export, Iron Ore. The health of the Chinese economy, its largest trading partner, is a factor, as well as inflation in Australia, its growth rate and Trade Balance. Market sentiment - whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) - is also a factor, with risk-on positive for AUD.

The Reserve Bank of Australia (RBA) influences the Australian Dollar (AUD) by setting the level of interest rates that Australian banks can lend to each other. This influences the level of interest rates in the economy as a whole. The main goal of the RBA is to maintain a stable inflation rate of 2-3% by adjusting interest rates up or down. Relatively high interest rates compared to other major central banks support the AUD, and the opposite for relatively low. The RBA can also use quantitative easing and tightening to influence credit conditions, with the former AUD-negative and the latter AUD-positive.

China is Australia's largest trading partner so the health of the Chinese economy is a major influence on the value of the Australian Dollar (AUD). When the Chinese economy is doing well it purchases more raw materials, goods and services from Australia, lifting demand for the AUD, and pushing up its value. The opposite is the case when the Chinese economy is not growing as fast as expected. Positive or negative surprises in Chinese growth data, therefore, often have a direct impact on the Australian Dollar and its pairs.

Iron Ore is Australia's largest export, accounting for $118 billion a year according to data from 2021, with China as its primary destination. The price of Iron Ore, therefore, can be a driver of the Australian Dollar. Generally, if the price of Iron Ore rises, AUD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Iron Ore falls. Higher Iron Ore prices also tend to result in a greater likelihood of a positive Trade Balance for Australia, which is also positive of the AUD.

The Trade Balance, which is the difference between what a country earns from its exports versus what it pays for its imports, is another factor that can influence the value of the Australian Dollar. If Australia produces highly sought after exports, then its currency will gain in value purely from the surplus demand created from foreign buyers seeking to purchase its exports versus what it spends to purchase imports. Therefore, a positive net Trade Balance strengthens the AUD, with the opposite effect if the Trade Balance is negative.

 

Date

Created

 : 2024.11.05

Update

Last updated

 : 2024.11.05

Related articles

Show more

Writer

FXStreet

Financial media

arrow
FXStreet

FXStreet is a forex information website, delivering market analysis and news articles 24/7.
It features a number of articles contributed by well-known analysts, in addition to the ones by its editorial team.
Founded in 2000 by Francesc Riverola, a Spanish economist, it has grown to become a world-renowned information website.

Was this article helpful?
No loading Yes loading

We hope you find this article useful. Any comments or suggestions will be greatly appreciated.  
We are also looking for writers with extensive experience in forex and crypto to join us.

please contact us at [email protected].

Thank you for your feedback.
Thank you for your feedback.

Previous article

prev

Gold price drops to one-week low, downside seems limited amid US political uncertainty

Next article

India Gold price today: Gold falls, according to FXStreet data

prev

Most viewed

NZD/USD Price Forecast: Tests nine-day EMA near 0.6000, channel's upper boundary

The NZD/USD pair halts its two days of losses, trading around 0.5990 during Tuesday's early European session.
New
update2024.11.05 16:56

Pound Sterling trades flattish ahead of US presidential election, Fed-BoE decisions

The Pound Sterling (GBP) trades in a very tight range around 1.2950 against the US Dollar (USD) in Tuesday's London session.
New
update2024.11.05 16:43

EUR/JPY strengthens ahead of ECB's Lagarde speech

The EUR/JPY cross attracts some buyers to near 165.75 during the early European session on Tuesday.
New
update2024.11.05 16:18

Forex Today: Markets remain on edge on US election day

Here is what you need to know on Tuesday, November 5: Financial markets remain on edge as the US presidential election takes center stage, with latest polls pointing to a tight race.
New
update2024.11.05 16:02

EUR/USD Price Forecast: The bearish outlook remains intact below 1.0900

The EUR/USD pair remains firmer near 1.0880 during the early European session on Tuesday.
New
update2024.11.05 15:13

USD/CHF remains below 0.8650, market caution emerges ahead of US presidential election

USD/CHF holds ground after registering losses in the previous session, trading around 0.8640 during the Asian hours on Tuesday.
New
update2024.11.05 14:52

FX option expiries for Nov 5 NY cut

FX option expiries for Nov 5 NY cut at 10:00 Eastern Time, via DTCC, can be found below.
New
update2024.11.05 14:24

Silver Price Forecast: XAG/USD remains steady around $32.50 ahead of US election

Silver price (XAG/USD) maintains its position around 32.50 during Asian trading hours on Tuesday as traders adopt caution ahead of the US presidential election.
New
update2024.11.05 13:57

AUD/NZD sticks to modest gains near one-week top, around 1.1030 area post-RBA

The AUD/NZD cross reverses an Asian session dip to the 1.0990 region and rallies to a one-week top on Tuesday in reaction to the upbeat Chinese data.
New
update2024.11.05 13:44

India Gold price today: Gold falls, according to FXStreet data

Gold prices fell in India on Tuesday, according to data compiled by FXStreet.
New
update2024.11.05 13:36

Disclaimer:arw

All information and content provided on this website is provided for informational purposes only and is not intended to solicit any investment. Although all efforts are made in order to ensure that the information is correct, no guarantee is provided for the accuracy of any content on this website. Any decision made shall be the responsibility of the investor and Myforex does not take any responsibility whatsoever regarding the use of any information provided herein.

The content provided on this website belongs to Myforex and, where stated, the relevant licensors. All rights are reserved by Myforex and the relevant licensors, and no content of this website, whether in full or in part, shall be copied or displayed elsewhere without the explicit written permission of the relevant copyright holder. If you wish to use any part of the content provided on this website, please ensure that you contact Myforex.

arw
  • Facebook
  • Twitter
  • LINE

Myforex uses cookies to improve the convenience and functionality of this website. This website may include cookies not only by us but also by third parties (advertisers, log analysts, etc.) for the purpose of tracking the activities of users. Cookie policy

I agree
share
Share
Line

Line
Facebook

Facebook
X

Twitter
Cancel