After the Aussie dollar’s big fall in July left it as the fourth-worst performing currency in the world for the month there was always a chance RBA governor Glenn Stevens would his rhetoric with his statement after the July Board meeting today.
Traders were certainly betting that way coming into the announcement at 2.30pm Sydney time with the Aussie a little better bid just before the number. Strong retail sales data earlier gave traders an excuse to act on their hunch the governor might change what he’s been saying recently.
And change he did, noting only in this August statement that:
The Australian dollar is adjusting to the significant declines in key commodity price.
That is a big shift from what he said just a month ago when Stevens highlighted that “the Australian dollar has declined noticeably against a rising US dollar over the past year, though less so against a basket of currencies. Further depreciation seems both likely and necessary, particularly given the significant declines in key commodity prices.”
So traders are buying the Aussie dollar.
Here’s the chart just 8 minutes after the statement.