(This is an excerpt from an article I originally published on Seeking Alpha on July 20, 2017. Click here to read the entire piece.)
{snip}
With THAT quote, Debelle rang loud and clear with a confirmation of my claims in my earlier post that the Bank would find a way to walk the market back from its hawkish interpretation of the last minutes. {snip}
Source: FreeStockCharts.com
I used the selling to take profits on my short-term AUD/USD short. {snip}
Debelle could not have been clearer in his discussion on the neutral rate. The RBA did not intended to communicate anything about imminent changes to monetary policy. {snip}
Debelle listed the following five, somewhat inter-related, explanations for extremely low policy rates around the globe:
{snip}
These global pressures have also forced Australia to maintain historically low policy interest rates. Debelle noted that more accommodative monetary policies around the globe helped drive the Australian dollar to levels higher than ideal for the current economy {snip}
In other words, in a world with monetary policies set more stimulative than Australia’s, a stronger dollar works against the Australian economy. Debelle resurfaced the RBA’s standing desire for a lower, not higher, exchange rate.
{snip}
Be careful out there!
Full disclosure: short the Australian dollar
(This is an excerpt from an article I originally published on Seeking Alpha on July 20, 2017. Click here to read the entire piece.)