Risk Aversion Reigns as Investors Stay on Edge

June 24, 2010

Australian Prime Minister Rudd resigned.  His popularity had melted after proposing a draconian tax on mining activity.  Australian markets celebrated only briefly because the government remains in the Labour Party’s hands.  Former Deputy PM Gillard becomes Australia’s first woman prime minister. The Fed’s statement yesterday acknowledged heightened external uncertainties.  News from Iran provided another source […] More

No Hint of When Australian Rate Increases Might Resume

June 1, 2010

The Reserve Bank of Australia left its Official Cash Rate (OCR) at 4.5%, matching analyst expectations.  Officials had dropped many hints that policy is now on pause.  There had previously been six rate hikes of 25 basis points each, starting last October and with follow-up moves in November, December, March, April and May.  No central […] More

Australian Interest Rate Preview

May 31, 2010

The minutes from the May Reserve Bank monetary policy meeting expressed concern about Europe’s sovereign debt crisis but more importantly signaled that interest rates are now “well placed,” meaning appropriate.  Another pause in tightening is thus widely expected.  From a low of 3.0%, the Official Cash Rate (OCR) was raised by 25 basis points each […] More

Weaker Euro, Pound and Swiss Franc

May 13, 2010

The dollar has advanced 0.4% against sterling, 0.3% versus the Swissy, and 0.2% against the euro, but it has softened against commodity-sensitive currencies like the Aussie dollar (0.6%), kiwi (0.5%) and Canadian dollar (0.6%).  Concerns persist that the EU rescue package will not prove adequate and about the impact of coming austerity.  Britain’s new Conservative-led […] More

Sixth Australian Rate Hike Likely Tuesday But Not Assured

May 3, 2010

In the case of the Reserve Bank of Australia, data trends tend to be a better guide than spoken words to monetary policy decision-making.  The central bank cash rate was previously raised by 25 basis points each last October, November, December, March and April from a cyclical low of 3.0% to 4.25% currently.  Rhetoric has […] More

Australian Cash Rate Raised a Fifth Time

April 6, 2010

The Reserve Bank of Australia became the first central bank to lift interest rates five times since the world recession, engineering a 25-basis point increase for the the fifth time in the last six meetings and issuing a statement that called today’s decision one more step in a process of re-attaining normal rates insofar as […] More

Reserve Bank of Australia Preview: Slight Edge to a Fifth Rate Hike Tuesday

April 5, 2010

The Reserve Bank of Australia has begun a gradual process of normalizing its key Official Cash Rate, having raised such last October, November, December, and March by 25 basis points each time.  The rhetoric of officials has been hawkish, stressing the following points: Australia was not affected by the world recession as much as anticipated […] More

Fourth Rate Hike in Australia, 25 Bps to 4.0%

March 2, 2010

Having been the first G-20 nation last October 6 to see a rate hike after the global financial crisis, Australia became the first economy anywhere to undergo a fourth increase.  All of them — one each in October, November and December — were by 25 basis points.  Most analysts, myself included, expected today’s move as […] More

No Rate Hike in Australia Sends AUD Lower

February 2, 2010

The Aussie dollar relapsed 1.1% against its U.S. counterpart after a surprise decision by the Reserve Bank of Australia not to implement a fourth rate hike now. The greenback otherwise slid 0.3% relative to the Canadian dollar and 0.1% against the euro, but has risen 0.3% against sterling and 0.1% versus the yen, Swiss franc […] More

Australian Cash Rate Not Raised This Month

February 1, 2010

The Reserve Bank of Australia cash rate was somewhat unexpectedly left at 3.75%, but the statement from officials noted that “if economic conditions evolve broadly as expected, the Board considers it likely that monetary policy will, over time, need to be adjusted further in order to ensure that inflation remains consistent with the target over […] More