AUDUSD Dips Amid Low Inflation: RBA Holds Rate

AUDUSD Analysis — The Australian dollar dropped to about $0.651, staying near its lowest in three weeks. This happened because the latest inflation figures from Australia were lower than expected, impacting the currency’s strength. In February 2024, Australia’s inflation rate was 3.4%, the same as the last two months, but it didn’t meet the expected slight rise to 3.5%.

Furthermore, retail sales in February didn’t increase as much as anticipated. In March, the Reserve Bank of Australia (RBA) decided to keep the interest rate steady at 4.35%, a peak not seen in 12 years, for the third consecutive time. However, the RBA removed its previous caution about the possibility of another rate hike. This change suggests the RBA believes inflation will slow down further, hinting at potential rate cuts later in the year.

On the international front, the US dollar got stronger as there’s a growing belief that US interest rates might stay high for an extended period, even as other big economies begin to lower their rates.

AUDUSD Dips Amid Low Inflation