Post RBA Rate Decision

As widely expected no policy change and as equally anticipated the  RBA  did mention that the exchange rate is providing headwinds on growth, but current price action is the key.
AUDUSD has continued to grind higher all session pushed on by stronger than expected China Caixin PMI that has commodities looking buoyant. While the USD weakness has been driving the commodity bloc ship of late, it now looks like commodity prices themselves are providing another thorn in the RBA’s side who have been leaning against the current Australian dollar ramp. But with little follow through after both Debelle and Lowe jawboning the currency last week, there was a high chance for the RBA to disappoint the doves, and  price action suggests  this
Despite holding in neutral gear, on the whole, the statement was balanced, and we could see   A $ extension fueled by a weaker US  dollar, surging iron ore prices and RBA soft shoe approach.
The RBA  continues to point out concerns regarding low wage growth and labour under-utilisation, combined with recent more delicate CPI print, so it’s unlikely the RBA will withdraw monetary stimulus this year, but this alone is not enough to shift the current tidal wave of A$ demand
The immediate reaction was to see a fall from around 0.8020 to 0.7995 . We have since come back 0.8020 +

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Stephen Innes

Stephen Innes

Head of Trading APAC at OANDA
Stephen has over 25 years of experience in the financial markets and specialises in Asian currencies at OANDA. After having started his trading career with NatWest Bank, he is based in Singapore as the Head of Trading Asia Pacific with OANDA.Stephen's market views focus on the movement of G-10 and ASEAN Currencies. Stephen has an extensive trading experience in Interest Rate Futures, Money Markets and Precious Metals. Before joining OANDA, he worked with organisations like Nat West, Garvin Guy Butler, Sumitomo Mitsui Banking Corporation. Stephen was born in Glasgow, Scotland, and holds a Degree in Economics from the University of Western Ontario.
Stephen Innes
Stephen Innes

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