Forex Flash: a December RBA cut is likely - Westpac

FXstreet.com (Barcelona) - RBA Governor Stevens spoke in the Melbourne evening yesterday. As Westpac notes, Stevens said that "as of the most recent meeting, as the minutes released earlier today show, the Board felt that further easing might be required over time. The Board was also conscious, though, that a significant easing of policy had already been put in place, the effects of which were still coming through and would be for a while."

Sean Callow, FX Strategist at Westpac, comments: "This places slightly more weight on the notion of further easing, which reinforces Westpac's view that while not a done deal, a Dec RBA cut is likely. Pricing is around 60% for -25bp. In the Q and A, he acknowledged that "the Aussie is a bit high", and when questioned about "passive intervention" he said "there was customer business the RBA kept on balance sheet as the currency level made it attractive to do so at the time"."