AUDUSD Analysis – RBA Holds Rates

The Australian dollar has recently surpassed the $0.66 mark (AUDUSD), reaching its highest position since mid-January. A weakening U.S. dollar drove this increase after disappointing U.S. labor market data emerged. Such weak indicators suggest that the Federal Reserve might adopt a more dovish (less aggressive) monetary approach.

This situation has boosted the Australian dollar, counterbalancing the Reserve Bank of Australia’s (RBA) lack of a strongly hawkish (aggressive) stance after it decided to maintain current interest rates.

AUDUSD Analysis - RBA Holds Rates

AUDUSD Analysis – RBA Holds Rates

AUDUSD Analysis – RBA Holds Rates

Despite the market’s anticipation of a hawkish signal, the RBA’s recent communications were more reserved. The bank noted that efforts to control inflation are experiencing a pause, although it remains open to any policy adjustments necessary moving forward.

Interestingly, Australia’s inflation rate has declined, marking the fifth consecutive quarter of easing, although it still exceeded expectations at 3.6% for the first quarter, higher than the predicted 3.4%. Additionally, contrary to expectations, March saw a slight increase in the monthly Consumer Price Index (CPI) to 3.5% from February’s 3.4%.

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