RBA Governor Philip Lowe has moved on from his previous narrative that the next move for the cash rate is more likely to be up than down. He said on Wednesday that “the probabilities appear to be more evenly balanced”, prompting CBA to push back their forecast of a RBA cash rate hike from November 2019 to November 2020.

“The Governor has shifted the RBA’s forward guidance to a neutral stance,” said CBA Senior Economist Gareth Aird.

The Governor appears to be holding the RBA’s relatively optimistic forecasts with less conviction, said Aird.

“We continue to believe that Governor Lowe is a reluctant rate cutter, but equally, the RBA looks further away than we had previously thought from raising interest rates,” he said.

“We now have the RBA cash rate on hold until late 2020 where a first hike would be appropriate if the RBA’s forecasts for economic growth, wages and inflation come to fruition.”

The Australian dollar dropped in value against the US dollar over night and has lost around 2 per cent in value since Governor Lowe’s speech, according to CBA Chief Currency Strategist, Richard Grace.