Reserve Bank governor Philip Lowe: End of QE doesn't mean cash-rate rise imminent

Developing Story.

Reserve Bank governor Philip Lowe's speech on the economic outlook today to National Press Club is underway and can be followed and listened to live at this link. 

Lowe is speaking following yesterdays RBA interest rate decision and before the bank will release a full set of economic forecasts on Friday.

Key comments, so far

Jobs growth strong, Unemployment Lowe.

Weathered economic storm better than expected. 

Pandemic is not yet behind us. 

US inflation pick up adds uncertainty to the outlook. 

Optimistic about country's prospects. 

End of QE doesn't mean cash-rate rise imminent.

Prepared to be patient. 

Moreo to come...

AUD/USD's reaction

So far the currency is stable at around 0.7139. 

RBA meeting, dovish but AUD rallies

Australia's central bank kept its cash rate at a record low of 0.1% on Tuesday and ended its A$275 billion ($194.40 billion) bond-buying campaign as expected, but pushed back hard on market wagers for an early rate rise.

The RBA emphasised that ceasing bond purchases did "not imply" a near-term increase in interest rates and the Board was still prepared to be patient. 

 "As the Board has stated previously, it will not increase the cash rate until actual inflation is sustainably within the 2 to 3% target range," RBA Governor Philip Lowe said in a brief statement.

"While inflation has picked up, it is too early to conclude that it is sustainably within the target band."

The Omicron outbreak has affected the economy, but it has not derailed the economic recovery," Lowe concluded. 

The dovish message sent the Aussie lower on the knee-jerk to 0.7033 though markets still think the RBA is behind the curve on inflation.

The Aussie has subsequently rallied into a critical resistance area on the charts as follows:

• AUD/USD Price Analysis: Bears are waiting to pounce from key higher time frame resistance structures