-Glenn Stevens, RBA Governor
As it was widely expected the Reserve Bank of Australia decided to keep its key refinancing rate at 2.5%, keeping it there for the eight consecutive month already. It means the central bank will stick to its pledge the monetary policy will remain unrevised for some time, as a period of stable rate is required to help the economy adjust to lower investment levels in the mining sector. The RBA believes that record-low interest rates as well as the lower exchange rate of the nation's currency will help the economy to finally emerge from the transition phase and find new solid drivers that can lead to prosperity. While some economists believe the next move from the RBA will be a rate hike, as the easing cycle is over, Stevens' comments that the Aussie is still at the "high by historical standards", suggested there is still a possibility the RBA will pull the trigger once again.
The AUD/USD pair has found a strong resistance around 0.93 and following the RBA's meeting, the pair first shot to 0.9303, while next retreated back to 0.9262. The pair has performed a strong rally since 2001 and experts are wondering when it will be over. Some consider 0.80-0.85 level during next 12-18 months, while others believe the pair has a potential to soar to the October 2013 high at 0.9750 over the same period of time. Moreover, the wildest guesses stand for the parity level.
© Dukascopy Bank SA