On Tuesday, the AUD to USD exchange rate slipped by 0.42% to $0.73 on the dovish outlook of the Reserve Bank of Australia Governor Philip Lowe yesterday.
Accordingly, he painted a dovish monetary policy outlook in his speech and dismissed interest rate hikes until 2023. He also pointed out that the first interest rate hike will be in 2024.
Lowe’s dovish stance is to support the economy from the negative impact of the Delta variant on the labor market. In addition, the RBA chief spoke with optimism about economic growth.
The central bank forecasted that the economy would recover in the fourth quarter and expand until next year.
Furthermore, the RBA expected the country to return to its pre-pandemic trends in the second half of 2022. As a result, its optimistic viewpoint hints at the retention of supportive policy settings.
Meanwhile, Australia’s second-quarter house price index improved by 6.70% from the previous rate of 5.40%. Also, the HPI data hiked from the analyst’s forecast of 6.00%.
Likewise, the business confidence declined to 5.00 from the previous level of 7.00. Then, the August employment change will be posted tomorrow. It is forecasted to decline to 90,000 from the previous data of 2,200. Similarly, the unemployment rate widened to 4.90% from 4.60%.
Meanwhile, currencies against the AUD also plummeted. The Japanese yen tumbled 0.33% to $80.74. The same with the New Zealand dollar as it plunged 0.31% to $1.03. Likewise, the Canadian dollar fell 0.48% to $0.93. Consequently, the CHF currency dropped 0.41% to $0.68.
GBP to USD Exchange Rate Hiked as AUD to USD Fell
Moreover, the GBP to USD exchange rate hiked as AUD to USD fell. The pound sterling soared 0.22% to $1.39.
Accordingly, traders digest the newly released UK employment figures. The Claimant Count Change, which measures the change in the number of unemployed people, increased to 58,600 from 48,900.
Similarly, UK employment change climbed to 183,000 from the previous record of 95,000. The data also edged up from the forecasted figure of 178,000.
Furthermore, the unemployment rate plunged to 4.60% from the previous rate of 4.70%. This newly released data contributed to the jump of the GBP to USD exchange rate.
Also, market participants turned their attention to the release of the US inflation later in the day.
Meanwhile, the US dollar index, which traces the greenback against other currencies, plunged 0.07% to $92.61.
Moreover, the euro-to-dollar exchange rate fell 0.03% to $1.18.
