RBA Lowe: Going to wait until seeing evidence that inflation has picked up in a sustainable way

The Reserve Bank of Australia's Philip Lowe has stated that it is plausible if the economy tracks to our forecasts rate hike will be on agenda later this year.

He says that there is no evidence economy is overstimulated at the moment.

He explained that they are going to wait until seeing evidence that inflation has picked up in a sustainable way and that he hopes over time real interest rates return to positive territory.

His comments during a testimony at a virtual hearing before the House of Representatives Standing Committee on Economics are being scrutinised for an insight as to when the RBA will start to raise rates.

His testimony comes shortly after very hawkish rhetoric from a voting member of the Federal Open Market Committee, James Bullard, who said that the Fed could consider hiking rates at an Inter-meeting. 

Traders are treading very carefully around the sentiment in markets but do expect the RBA to follow suit sooner than previously communicated by the central bank. 

AUD/USD technical analysis

At the time of writing, the US dollar is bid and the Aussie is under pressure, falling below a key area of support, support highlighted in the prior analysis as follows:

AUD/USD live market