Rate decision from the Reserve Bank of Australia was the highlight of today's Asia-Pacific session. Central bank was expected to keep rates unchanged for the fourth meeting in a row, with official cash rate seen staying at a 12-year high of 4.35%. Markets were hoping that RBA may change wording of policy statement to highlight that hikes are more likely than cuts given recent hawkish surprises in inflation data and still-strong data from Australian job market. Nevertheless, no such hawkish shift was offered and AUD weakened following the decision.
However, RBA Governor Bullock acknowledged during the post-meeting press conference that the Board discusses the option of raising interest rates at the meeting and said that while RBA might have to raise rates again, it doesn't mean that it has to. Bullock said that the right stance at the moment is to keep policy where it is now and observe the economy. While central banker noted that RBA needs to be vigilant on inflation risks, she also said that she doesn't think more tightening will be necessarily. Overall, lack of change in statement wording as well as comments from RBA Governor Bullock sounded somewhat dovish and a pullback in AUD today looks justified.
Start investing today or test a free demo
Open real account TRY DEMO Download mobile app Download mobile appAUD is the worst performing G10 currency today. Taking a look at EURAUD chart at D1 interval, we can see that the pair is bouncing off the 1.6225 support zone today. Pair recovers from a 4-month low and the first near-term resistance zone to watch, should the rebound continue, can be found in the 1.6450 area.
Source: xStation5
The material on this page does not constitute as financial advice and does not take into account your level of understanding, investment objectives, financial situation or any other particular needs.
All the information provided, including opinions, market research, mathematical results and technical analyses published on the website or transmitted to you by other means is provided for information purposes only and should in no event be interpreted as an offer of, or solicitation for, a transaction in any financial instrument, nor should the information provided be construed as advice of legal or fiscal nature.
Any investment decisions you make shall be based exclusively on your level of understanding, investment objectives, financial situation or any other particular needs. Any decision to act on information published on the website or transmitted to you by other means is entirely at your own risk. You are solely responsible for such decisions.
If you are in doubt or are not sure that you understand a particular product, instrument, service, or transaction, you should seek professional or legal advice before trading.
Investing in OTC Derivatives carries a high degree of risk, as they are leveraged based products and often small movements in the market could lead to much larger movements in the value of your investment and this could work against you or for you. Please ensure that you fully understand the risks involved, taking into account your investments objectives and level of experience, before trading, and if necessary, seek independent advice.