SYDNEY, Feb. 7 (Xinhua) -- Reserve Bank of Australia (RBA) Governor Philip Lowe made a speech on Wednesday afternoon where he indicated that the likelihood of a change in the official interest rate was now roughly evenly placed between a hike and a cut.
In his first public statement of the year Lowe said that in terms of which way the official interest rate would move next, "the probabilities appear to be more balanced," where as previously an increase had appeared most likely.
Rates have been on hold at a historic low of 1.5 percent since August 2016.
"It was certainly a very important statement from the Governor because he so clearly flagged a shift in the RBA bias," CMC markets chief market strategist Michael McCarthy told Xinhua.
"Up until this point the RBA has had a tightening bias and yesterdays speech seemed to go a long way towards neutralising that."
While the Australian dollar fell sharply following the news, the share market was not entirely unprepared, with recent weak financial data already stirring speculation that the RBA would shift it's policy.
Before the speech interest rate markets were pricing the future as a 50-50 scenario.
"To some extent some in the markets would argue that this is an acknowledgment of the reality that traders have been looking at for some time," McCarthy said.
However unlike some, McCarthy is still expecting the rate to rise when the RBA do make their move.
