On Tuesday (September 8) during the Asian session, the Australian dollar traded in a narrow range around 0.7210 against the US dollar, experiencing a slight decline during the day, but remaining within its high range since May 15. Behind the exchange rate movement, the Reserve Bank of Australia's (RBA) policy statements have become the main focus of the market. RBA Assistant Governor Hunt stated on Tuesday that the central bank is "intentionally cooling" the housing market and the broader economy, viewing below-trend growth as an expected outcome of the current policy setting rather than an unexpected consequence. Hunt explicitly stated that he does not expect a recession, but rather hopes for a slowdown relative to trend, positioning the current tightening cycle as a "controlled slowdown" rather than a hard landing or premature end to tightening.

The Reserve Bank of Australia is "intentionally cooling" the economy, and the housing sector is being reassessed.

Reserve Bank of Australia (RBA) Assistant Governor Jeremy Hunt explicitly stated that the central bank is currently "intentionally cooling" the housing market and the broader economy, viewing below-trend growth as an expected outcome of the current policy framework. She specifically pointed out that the actual impact of house price changes on consumer spending is "actually quite small," a judgment that differs from the traditional wealth effect framework—which holds that falling house prices directly suppress consumer spending. Hunt's remarks indicate that the RBA prefers to view the housing channel primarily through economic activity and the construction industry, rather than solely relying on the wealth effect. She also emphasized that the central bank does not anticipate a recession, but rather aims for a controlled slowdown relative to trend, thus positioning this tightening cycle as a "controlled slowdown" rather than a hard landing. This policy framework demonstrates the RBA's confidence in the current tightening path and reduces market concerns about excessive policy suppression of the economy.

The Australian dollar found marginal support, and expectations of further tightening strengthened.

The overall policy tone indicates that the Reserve Bank of Australia (RBA) is satisfied with the current tightening path, which provides marginal support for the Australian dollar as it further strengthens market expectations that the central bank may continue to tighten monetary policy. Investors will closely watch subsequent speeches by RBA officials and related economic data. If the central bank continues to release hawkish signals, the Australian dollar is expected to test the 0.7250 level; conversely, if economic data is significantly weak or the official tone softens, the exchange rate may fall back to around 0.7150 to seek support. The RBA's narrative of "controlled slowdown" suggests that this rate hike cycle is not yet fully over, thus providing structural support for the Australian dollar. The market will also focus on how subsequent inflation and employment data validate the policy path. Hunt's reassessment of the housing channel has also reduced market concerns about potential obstacles to policy transmission to some extent, further stabilizing the Australian dollar's policy premium.

Institutional Views

JPMorgan Chase believes the current Australian dollar price level lacks appeal and recommends waiting for a pullback to the 0.7080-0.7000 range before adding to long positions. The bank points out that the bullish logic for the Australian dollar is based on traditional factors such as the Reserve Bank of Australia's relatively tight policy stance, favorable interest rate differentials, and its commodity currency characteristics; however, the exchange rate is facing resistance at current levels. Strategically, JPMorgan Chase prefers to rebuild long positions near 0.7080, with deeper support at 0.7000. If the exchange rate fails to fall back to the target range, the bullish view may lack an ideal entry point; conversely, if it breaks below 0.7000, the risk of a deeper correction should be noted.

Summarize

The Reserve Bank of Australia (RBA) intends to cool the economy and housing market, viewing below-trend growth as an expected outcome. House price changes have a "relatively small" impact on consumption, and the central bank does not anticipate a recession. This overall tone supports the Australian dollar and reinforces expectations of further tightening. The Australian dollar is likely to trade in the 0.7150-0.7250 range in the short term, with attention focused on subsequent data and central bank signals. The RBA's narrative of "controlled slowdown" suggests the rate hike cycle is not yet over, providing structural support for the Australian dollar. The market will focus on subsequent inflation and employment data to validate the policy path. Hunt's reassessment of the housing channel has reduced market concerns about impaired policy transmission. (Australian dollar to US dollar daily chart, source: EasyForex) At 13:10 Beijing time, the Australian dollar to US dollar exchange rate was 0.7214/15.