Lunatic RBA blasts Australian dollar higher

See the latest Australian dollar analysis here:

Macro Afternoon

It’s been like a warm blanket settling over markets for the past few weeks as the Lunatic RBA finally began to talk down the AUD. But it’s back to regular programming today as Phil Lowe ripped it off with a icy blast that questioned the usefulness of global easing:

Lowe said the accomodative monetary policy would not work if everyone is easing, offsetting the positive effect of weaker exchange rates. Lowe’s comments come at a time when the markets are priced in for 50 basis point rate cut before the year-end. The central bank cut rates by 25 basis points to a record low of 1.25% earlier this month.

And up she goes:

At a certain point you would think that the Lunatic RBA might learn that its utterances matter, like when an obsession with Fed cuts is driving sentiment under your currency. But no. Bonds were also hit:

Stocks didn’t like it much, either:

Dalian is down:

Big Iron too:

Big Gas is up with Iran tensions:

Big Gold taking a breather:

Big Banks too though the dash for trash trend remains up:

Big Realty is sagging as Sugar Daddy sours:

Once again we see that the Lunatic RBA could not fight its way out of a currency war wet paper bag.

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  1. GunnamattaMEMBER

    Some of those punters up the top of the RBA, they would have to live off 200k plus a year. And they have simply got it so right for so long

    The stronger for longer commodity boom…….
    The decade of wage outlooks which arent in the same galaxy we live in……..
    The joys of the aged living of decently earned savings…….
    The debt extravaganza we have all been exhorted to join in……….
    The rise of meaningless asset prices……
    The superb oversight of Australias financial system over a generation of ever more tawdry debt promulgation……

    They deserve a tax cut

    And we should thank the government and the ALP for rewarding them with one

    • Difficult to know what your point is. Differential tax cuts depending on your profession?

  2. DingwallMEMBER

    “Dr Lowe said fiscal stimulus and policy changes to support business investment needed to be considered to maximise national prosperity.”
    Great … business investment meaning the usual construction/real estate sugar hit meaning Melbourne and Sydney and the white elephant Canberra. Meanwhile the pitifully small, real businesses are probably haemorrhaging under power costs, rents etc etc.

    “Nonetheless, Dr Lowe reiterated that further rate cuts were likely, echoing the minutes of the RBA’s June meeting, which were released on Tuesday”
    So either way he will follow the crowd anyway …. and probably 9 months behind just to make sure the AUD is somewhat stable.

  3. Assuming that they do know the implications of their statements, it looks like they want a lower currency. It also seems they fear a MUCH lower currency. The jawbone just isn’t designed for such a delicate task.

  4. As i have said before the RBA should have done 50 points instead of 25, why wait if its all going pair shaped, 50p wud have smashed the AUD as mkt was not expecting it…