RBA Stevens sends hint Central Bank not done cutting rates?

By FXStreet RBA Governor Stevens, who is speaking at the Trans-Tasman Business Circle boardroom briefing, has given what the market perceives as a decent hint that the RBA may not be done cutting interest rates, after he said that he remains very committed to inflation targeting monetary policy framework, Reuters reports.

The comments, which follow surprisingly low inflation data in Australia, have sent the Australian Dollar sharply lower, as the market prices in further rate cuts by the RBA. While the RBA tends to sounds quite ambiguous on its next policy moves, today’s comments by Stevens are seen as a small yet relevant piece of information that has prompted the market to become slightly more confident on further rate cuts, judging by the reaction of the Aussie, which just broke 0.72 against the US Dollar.

Other headlines of note by Stevens were:

– Medium term inflation targeting is not rigid and does not demand knee-jerk reaction from our part.

– I suspect there is quite some years of fiscal repair work for the government in the period ahead

– True that inflation is very low, technically it is below our announced target

– A$ doing what you’d expect it to do at the moment

– We see exchange rate …read more

Source:: FX Street