FXStreet (Bali) – The Australian Dollar is trading higher across the board, with demand having intensified quite notably following the decision by the RBA to leave interest rates unchanged at 2% in Australia.
RBA fails to strengthen dovish rhetoric
One should not forget the fact that AUD/USD has been falling for the last 11 days out of 13, with the outright supply in the commodity currency being driven, in large part, not just by a startling DXY recovery, but also by a repricing of further RBA rate cuts going forward.
Amid such scenario heading into the RBA risk event, the absence of a clear explicit easing bias in today’s RBA statement, was enough to see renewed demand in the Aussie. The removal of a near-term rate cut risk, very minimal, has led short-term smart money to engage in AUD bids.
While there was no explicit easing bias noted in the RBA statement today, leaving rates on hold at 2% – record low – the last paragraph, while not providing forward-guidance, continues to read as though more cuts might be an option to be considered should economic conditions deteriorate in Australia.
RBA statement: Further assessment needed to assess policy
RBA noted in its monetary policy stamtent: “Having eased monetary policy last month, the Board today judged that leaving the cash rate unchanged was appropriate at this meeting. Information on economic and financial conditions to be received over the period ahead will inform the Board’s assessment of the outlook and hence whether the current stance of policy will most effectively foster sustainable growth and inflation consistent with the target.”
(Market News Provided by FXstreet)