The RBA held interest rates steady at 4.35% despite rising inflation concerns. Discover how the RBA's updated forecasts and global central bank actions could impact AUD/USD
The Reserve Bank of Australia decided to keep the interest rate at a 12-year high on Tuesday, deflating the hawkish buildup priced in by the market. Ahead of the meeting, markets had priced in a 43% chance of anotherThe major stumbling block for the RBA has been the recent resurgence behind inflation. Quarterly and yearly inflation measures proved to be hotter-than-expected for Q1, with the monthly indicator for March adding to the trend of data surprises.
Acquire an in-depth understanding of the role played by the Australian dollar in terms of global trade and its significance as a gauge of risk sentiment :is understandable after the RBA failed to live up to hawkish expectations and that disappointment is playing out via a softer AUD. Recentstrength has also helped extend the move but the updated RBA forecasts suggest there may be little room for dovishness for the rest of the year which could see the Aussie dollar stabilise.
The current pullback may extend to the 200-day simple moving average – the next level of interest after breaking below 0.6580. Weaker US jobs data has also calmed expectations around re-accelerating inflation in the US, which may start to take affect in a relatively quieter week. Another thing to note with the US dollar is the divergence between the recent USD uplift despite treasury yields heading lower. If the dollar follows yields lower, the AUD/USD pullback may lose steam.
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