Investing.com - The Australian dollar traded lower against its U.S. counterpart during Wednesday’s Asian session as traders braced for a potential surprise out of the Reserve Bank of Australia.
In Asian trading Wed, AUD/USD fell 0.13% to 0.9468, near a two-week low. The pair was likely to find support at 0.9435, the low of October 14 and resistance at 0.9623, Monday's high.
While conventional wisdom says RBA will not cut rates in the near-term, lack of contributions from non-mining sectors to Australian economic growth say RBA could attempt to do more to jolt growth as the mining boom wanes.
Another factor to be considered is RBA Governor Glenn Stevens’s penchant for surprises. Stevens has cut or raised Australia’s benchmark rate 26 times since his tenure began in September 2006, good for the highest amount among developed world central bankers, Bloomberg reported.
Five years ago, Australian rates were 7.25%. Today, the benchmark overnight cash rate is 2.5%, low by the country’s standards, but high compared to the rest of the developed world. RBA has slashed rates by 225 basis points in the past two years alone.
Traders see no chance RBA will raise rates over the next year and little chance of another rate cut before next year.
Still, some banks have predicted the central bank could take rates higher in 2015 with an eye toward a benchmark rate of 4% in 2016.
On Tuesday, the Aussie came under pressure after RBA Governor Stevens said the currency's level isn’t supported by costs and productivity in the economy and the nation’s terms of trade are more likely to fall than rise.
Elsewhere, AUD/JPY fell 0.12% to 92.98 while AUD/NZD lost 0.05% to 1.1474.
In Asian trading Wed, AUD/USD fell 0.13% to 0.9468, near a two-week low. The pair was likely to find support at 0.9435, the low of October 14 and resistance at 0.9623, Monday's high.
While conventional wisdom says RBA will not cut rates in the near-term, lack of contributions from non-mining sectors to Australian economic growth say RBA could attempt to do more to jolt growth as the mining boom wanes.
Another factor to be considered is RBA Governor Glenn Stevens’s penchant for surprises. Stevens has cut or raised Australia’s benchmark rate 26 times since his tenure began in September 2006, good for the highest amount among developed world central bankers, Bloomberg reported.
Five years ago, Australian rates were 7.25%. Today, the benchmark overnight cash rate is 2.5%, low by the country’s standards, but high compared to the rest of the developed world. RBA has slashed rates by 225 basis points in the past two years alone.
Traders see no chance RBA will raise rates over the next year and little chance of another rate cut before next year.
Still, some banks have predicted the central bank could take rates higher in 2015 with an eye toward a benchmark rate of 4% in 2016.
On Tuesday, the Aussie came under pressure after RBA Governor Stevens said the currency's level isn’t supported by costs and productivity in the economy and the nation’s terms of trade are more likely to fall than rise.
Elsewhere, AUD/JPY fell 0.12% to 92.98 while AUD/NZD lost 0.05% to 1.1474.