There have been some cautious outlines of how the Reserve Bank of Australia might go about QE and what it would mean for the AUD (our focus here at Forexlive of course).
CBA were very careful in providing their excellent explanation (summarised here) to say that QE is not on the horizon for now.
Others, though, have been more gung ho. I reckon they are incorrect to be flagging QE any time soon. Here's why (apart from there being plenty of scope to further lower the cash rate):
- Yesterday's RBA Bulletin - there were a few ideas floating around it would contain something on QE options, in which case we could assess how likely it was. There was nothing in the bulletin on it though
- There was a discussion on policy via OMOs (open market operations - fx swaps, repos), which were used to keep funding ample during and post GFC. This option is much more likely to be used again before QE is considered.
