Reserve Bank of Australia (RBA) Governor Glenn Stevens gave a speech earlier before the House of Representatives' Standing Committee on Economics. However, he said nothing that was already said over the previous weeks.
Of primary significance is the RBA's outlook on the aussie, which they consider as 'uncomfortably high'. Aside from that, Governor Stevens said that investments in the resource sector would decline "gradually at first but more quickly thereafter." Although other sectors aside from the resource sector will pick up eventually, he added that, "this will take some time yet and it will be against the backdrop of a challenging environment."
The Governor also spoke about having "an open mind" about the possibility of lowering interest rates further.
The speech helped boost the AUD/USD pair at least a little as it rose by several pips after. The pair bottomed out at 0.8891, but has since managed to go up to around the 0.8925 level at the opening of the Asian session. It is currently trading at 0.8912, with initial resistance seen at 0.8959, followed by 0.8982. Meanwhile, initial support is at 0.8907, followed by 0.8884.
The aussie also received a boost against the kiwi after the Governor's speech. Although it dipped slightly after the release of New Zealand's Business Confidence data (64.1% in December, in contrast to 60.5% during the previous month), the pair recovered quickly. It is currently trading at 1.0779, with initial resistance seen at 1.0840, followed by 1.0868. Meanwhile, initial support is at 1.0786, followed by 1.0759.
Will They Taper or Not?
Later today, traders' focus will be on the FOMC meeting to see whether or not the Fed will finally begin tapering its QE program. The EUR/USD pair dipped sharply in yesterday's trading, as it bottomed out at 1.3731, but it recovered fairly quickly as it returned to the 1.3780 zone.
The EUR/USD pair is currently trading at 1.3765, with initial resistance seen at 1.3817, followed by 1.3852. Meanwhile, initial support is at 1.3745, followed by 1.3711.
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