Australian Dollar softening
At the start of today’s trading session, the value of the Australian Dollar has slightly declined.
Possibility of Additional RBA Rate Increases
The Reserve Bank of Australia’s (RBA) most recent rate increase looks to pave the way for more rate increases in the near future.
Inflation is still a major concern
The ongoing fight against inflation remains a serious problem, and forthcoming developments may put the efficiency of the RBA’s communication tactics in question.
RBA Governor’s Upcoming Public Appearances
RBA Governor Philip Lowe is scheduled to give his semi-annual evidence to the House of Representatives Economics committee on Friday and to the Senate estimates committee on Wednesday.
Release of Employment Data on Thursday
In the middle of these public appearances, the much-awaited employment report will be made available on Thursday.
The Pandemic’s Effect on Monetary and Fiscal Policy
The worldwide pandemic has led to an ultra-loose fiscal and monetary policy, with the forecast for inflation expectations playing a crucial role. If there is a significant level of risk connected to this component, it could raise the return needed for bond investments, increasing the debt load and thus lowering long-term national productivity and quality of living.
The RBA’s Contribution to Tighter Financial Conditions
The tighter financial conditions are merely the result of prior actions, notwithstanding the fact that certain politicians in Canberra may be trying to pin the blame on the RBA. In an effort to stifle demand and control inflation, the RBA is competing with other central banks to hike rates.
Global Central Banks’ Impact on Currencies
The events of last week have demonstrated that, at least temporarily, until another central bank intervenes, the currencies of central banks with a hawkish posture are likely to react in like. The AUD/USD exchange rate might be significantly impacted by the RBA’s decisions in the forthcoming meetings.