Australian dollar

Good morning, 

For a take on the RBA decision yesterday and its economic outlook, please watch the video below.

In a nutshell, it is of great concern that they are totally dismissive of inflation over all time horizons, and see a quick, strong economic recovery from the current Delta shutdowns.

Probably wrong on both points, this means Australia has a future of a well behind the curve central bank. This creates a double risk for the economy and markets, in the form of higher inflation and eventually higher rates than we would otherwise have needed to have.

Being very much a bear, I am nonetheless watching resistance at .7425. A break above there, could see a greater quantum level correction. Favoured scenario, is that level, or immediately .7405, will contain for downtrend resumption. That said, .7425 is a level to keep an eye on.

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Aug 04 2021

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