-
The Reserve Bank of Australia (RBA) kept the cash rate at 3.85 %, defying consensus expectations for a 25 bp cut and signalling it will reassess policy after the 30 July quarterly CPI.
-
Governor Michele Bullock defended the Bank’s “cautious, gradual” approach, arguing its communication is ample and that the only debate on the Board is timing, not direction, of easing.
-
AUDUSD popped toward 0.6550 on the decision, but bulls hesitated as traders recognised the move is a delay, not a cancellation, of the easing cycle; the pair remains dependent on forthcoming inflation data and global risk sentiment.
The council voted 6–3 to keep interest rates unchanged, explaining that with slowing inflation and the earlier 50 bp cuts, it is reasonable to pause and wait for more data. Policymakers emphasized that inflation risks are now “more balanced,” the labor market remains tight, but global trade uncertainty calls for patience.
At the post-meeting press conference, Governor Bullock rejected claims of unclear RBA messaging. She asserted that the Bank provides “sufficient information,” and any confusion stems from market misinterpretations rather than a lack of communication. She downplayed the earlier discussion of a possible larger 50-basis-point cut considered in May, calling it an “alternative” that was quickly dismissed. She stressed that the current pause simply allows time to confirm the inflation trend. She also noted that monthly CPI readings are volatile, and the quarterly July print will be decisive for the August decision.
Start investing today or test a free demo
Create account Try a demo Download mobile app Download mobile appThe Australian dollar initially strengthened as investors closed short positions after the surprise decision, but the rally stalled below technical resistance near 0.6550 and the upper bound of the daily range. So far, price action suggests the market views today’s decision as a tactical pause rather than a strategic shift.
The content of this report has been created by XTB S.A., with its registered office in Warsaw, at Prosta 67, 00-838 Warsaw, Poland, (KRS number 0000217580) and supervised by Polish Supervision Authority ( No. DDM-M-4021-57-1/2005). This material is a marketing communication within the meaning of Art. 24 (3) of Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (MiFID II). Marketing communication is not an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC and Commission Delegated Regulation (EU) 2016/958 of 9 March 2016 supplementing Regulation (EU) No 596/2014 of the European Parliament and of the Council with regard to regulatory technical standards for the technical arrangements for objective presentation of investment recommendations or other information recommending or suggesting an investment strategy and for disclosure of particular interests or indications of conflicts of interest or any other advice, including in the area of investment advisory, within the meaning of the Trading in Financial Instruments Act of 29 July 2005 (i.e. Journal of Laws 2019, item 875, as amended). The marketing communication is prepared with the highest diligence, objectivity, presents the facts known to the author on the date of preparation and is devoid of any evaluation elements. The marketing communication is prepared without considering the client’s needs, his individual financial situation and does not present any investment strategy in any way. The marketing communication does not constitute an offer of sale, offering, subscription, invitation to purchase, advertisement or promotion of any financial instruments. XTB S.A. is not liable for any client’s actions or omissions, in particular for the acquisition or disposal of financial instruments, undertaken on the basis of the information contained in this marketing communication. In the event that the marketing communication contains any information about any results regarding the financial instruments indicated therein, these do not constitute any guarantee or forecast regarding the future results.
