The Aussie remains under pressure. Overview for 02.02.2021
AUDUSD continues falling after the RBA’s February meeting.
The Australian Dollar remains under pressure against the USD on Tuesday. The current quote for the instrument is 0.7627.
Earlier this morning, the Reserve Bank of Australia had its first meeting this year and kept the benchmark rate unchanged at 0.10%, just as expected. Other parameters of the regulator’s monetary policy also weren’t expected to change but the RBA decided the other way. This time, the central bank made a decision to expand the bond-buying program by another A$100 billion (~$76.3 billion).
This is a pretty significant expansion to the existing program, which is also worth A$100 billion will expire in March 2021. It appears that the stimulus program will continue in order to, according to the RBA, prevent the country’s interest rates from growing. On average, the regulator will buy bonds for A$5 billion a week, thus providing significant support to the Australian economy
In the comments, the RBA said that the labor market was more or less stable, the number of jobs went up while the unemployment decreased to 6.6%. At the same time, the retail sales report showed some revival, which is also a good sign. These were exactly the comments investors were waiting for but they didn’t help the Aussie. The program expansion puts pressure on the national currency although its effect is nothing but positive.
The RBA Governor will speak before the end of this week – he is expected to talk about the economic outlook and other aspects, that’s why the volatility period of the Aussie is “far from done”.