1. The RBA may keep the fee at 0.10% until 2024
2. The epidemiological situation in developing countries continues to deteriorate
3. The dollar has recovered, but remains vulnerable
Today the Reserve Bank of Australia decided to keep the interest rate at a record low of 0.10%. The regulator also left the volume of the asset repurchase program unchanged, noting that changes are not expected until 2024. At the final press conference, the head of the bank, Philip Lowe, said that the regulator does not intend to tighten monetary policy until inflation consolidates in the range of 2-3%. This is not expected to happen until 2024 at the earliest. The AUD / USD pair is trading down 0.25%.
New foci of COVID-19 have been reported in Bhutan, Sri Lanka, Nepal, Thailand and Laos in recent days, according to DailyFX.com. The number of cases in India continues to rise. New strains of the virus are more infectious and deadly, which increases the vulnerability of developing countries to the virus in the absence of the necessary amount of vaccine and adequate resources in health care. At the same time, vaccination rates are accelerating in the four largest EU economies, and the number of infections and hospitalizations is stabilizing.
The dollar index increased by 0.25% today, but the US currency remains vulnerable after the publication of unexpectedly weak manufacturing PMI data. Additional pressure on the dollar is exerted by the dynamics of long-term Treasury yields. Since the start of the day, the yield on 10-year bonds has declined from a high of 1.655% to 1.578%. Therefore, at the beginning of the European trading session, we can see the weakening of the American currency.
News to watch out for today:
08:30 GMT. UK: Manufacturing PMI