With much of the world on holiday for Easter, trading started proper on Tuesday with the latest interest rate decision from the Reserve Bank of Australia. With most of the markets expecting a 25bp cut, the Aussie surged as the RBA left rates on hold at 2.25%.
AUD/USD, which had been trading just under .76, broke through this and breached .77 on the back of the surprise non-move. The gains were short-lived however, as the markets digested the content of the statement which stated “further depreciation seems likely” and “a lower exchange rate is likely to be needed to achieve balanced growth in the economy.” AUD/USD quickly retreated back to .7625 as London came online.
Read the rest of the article This week in the markets: Dollar continues to strengthen on FOMC minutes