AUD/USD keeps gains even as RBA's Debelle says rate hike unlikely

The AUD/USD pair shrugs off dovish comments by a Reserve Bank of Australia (RBA) official and continues to trade at session highs above 0.73. RBA's De  |  24/11/2020 02:56
  • AUD/USD retains bid, trades 0.3% higher at 0.7314.
  • RBA's Deputy Governor says rate hikes unlikely for three years. 

The AUD/USD pair shrugs off dovish comments by a Reserve Bank of Australia (RBA) official and continues to trade at session highs above 0.73. 

RBA's Debelle was out on the wires a few minutes before press time, stating that the central bank is unlikely to raise rates for three years and bond purchases need to continue as Australia's 10-year government bond yields are still higher than its peers. 

Other key quotes

  • Must be careful not to remove policy stimulus too early
  • Australia's government debt is very manageable
  • A materially lower jobless rate needed to lift wages, inflation
  • says banks have strong balance sheets to support the economy into recovery
  • The average mortgage interest rate paid by households to decline further
  • News about vaccines should help bolster confidence

The central bank has reiterated time, and again that policy normalization is at least a few years away. As such, Debelle's dovish comments are not surprising and have failed to influence the pair. 

The AUD/USD pair picked up a bid below 0.7290 early Tuesday and is currently trading at 0.7314, representing a 0.3% gain on the day. 

Australia reported preliminary trade numbers for October, showing a 6% month-on-month rise in exports and an 8% increase in imports. The trade surplus narrowed to AUD 4,840 million versus AUD 5,630 million in September. 

Technical levels

 

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