« Currency Markets Return to “Normal”! | Home | Japan Tries to Jaw-bone Yen Lower! »
RBA Raises Rates Again!
By Mike Conlon | December 1, 2009
The Reserve Bank of Australia raised rates another .25% to 3.75% for a record 3rd straight month. While this is not surprising (19 out of 20 analysts called it), the Aussie (AUD) has responded modestly considering that they are seemingly exiting the recession faster than everyone else. The reason its not going gangbusters is because RBA governor Stevens may now pause the rate hikes, as inflation appears to be well within his target range. Remember, the markets are forward looking, so the impact of these rate hike were already priced in.
Meanwhile, all eyes were on Japan, as the BOJ held an unscheduled policy meeting that was expected to produce drastic measures to try to weaken the yen (JPY) from 14 year highs. Yen sold off quickly, but it appears as though the market was not impressed with their plan so it may not work as they hope. Meanwhile, yen weakness is still persisting (down 2.1% vs. NZD, 1.8% vs. CAD, 1.25% vs. AUD) but I would not be surprised to see this trend reverse.
It also appears that this is a risk-taking day as well, thereby exacerbating JPY and to a lesser extent USD weakness.
Lastly, CAD is showing continued strength on the heels of its 3rdQ GDP report from yesterday.
I’m going to be watching carefully, looking for pullbacks or possible reversals if the charts comply.
So check back later!
To learn more about how you can take advantage of the forex market, please check out our courses!
Want to follow the market live in a free, real-time practice account? Click here!
noneTopics: What To Look At In The Market | 1 Comment »
December 2nd, 2009 at 7:26 am
In some parts of the world the rates are dropping and in other parts it is rising.