Forex Today: Hawkish RBA Sees July Rate Hike

Adam Lemon

Comments by RBA Governor Lowe indicate the RBA will hike its interest rate next month by either 0.25% or 0.50%, 

  • The Reserve Bank of Australia released the minutes of its most recent policy meeting, which was preceded by comments from RBA Governor Lowe. Lowe took a hawkish tilt, suggesting that the RBA will likely hike its interest rate at its next meeting by either 0.25% or 0.50%. Lowe also said he does not see a recession in Australia as likely to happen soon. Although the AUD traded a bit higher following these comments, the rise was small and not very significant. 
  • Federal Reserve member Bullard yesterday suggested that inflation may remain higher for longer than the Fed is broadly expecting. 
  • Cryptocurrencies have been mostly consolidating after last week's sharp falls, giving some hope to crypto buyers that we might be seeing a bottom. However, it is much too early to have any confidence the falls will not resume soon. 
  • The Forex market was very quiet yesterday due to US markets being closed for the Juneteenth federal holiday. This morning we are seeing the US Dollar begin to strengthen in line with its long-term trend. The USD/JPY currency pair is not far from 20-year highs so is worth keeping an eye on, as the Japanese Yen is a weak currency. 
  • Markets have enjoyed a small risk-on rally in recent hours, with stock markets and some commodities, notably WTI Crude Oil, trading higher. 
  • Crypto exchanges and other elements of the cryptocurrency ecosystem have come under pressure due to sharp falls in crypto, with some exchanges refusing withdrawals. This suggests it may be safer trading crypto with cryptocurrency brokers rather than exchanges at present. 
  • There will be a release today of Canadian Core Retail Sales data.  
  • Daily new coronavirus cases globally rose last week, against the long-term trend.  
  • It is estimated that 66.3% of the world’s population has received at least one dose of a coronavirus vaccination, while approximately 6.9% of the global population is confirmed to have contracted the virus at some time, although the true number is highly likely to be much larger.  
  • Total confirmed new coronavirus cases worldwide stand at over 539 million with an average case fatality rate of 1.17%.  
  • The rate of new coronavirus infections appears to now be significantly increasing in Austria, Bahrain, Brunei, Ethiopia, Dominican Republic, Israel, Italy, Kenya, Morocco, Qatar, Saudi Arabia, Uruguay, Chile, Germany, Guatemala, and the UAE.
Adam Lemon

Adam Lemon began his role at DailyForex in 2013 when he was brought in as an in-house Chief Analyst. Adam trades Forex, stocks and other instruments in his own account. Adam believes that it is very possible for retail traders/investors to secure a positive return over time provided they limit their risks, follow trends, and persevere through short-term losing streaks – provided only reputable brokerages are used. He has previously worked within financial markets over a 12-year period, including 6 years with Merrill Lynch.
Learn more from Adam in his free lessons at FX Academy

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