Ella 
AUD/NZD has attracted some sellers around 1.0990 during early European trade on Tuesday. The Reserve Bank of Australia (RBA) decided to keep interest rates unchanged at 4.35% at its May meeting, but the tone was less hawkish than the March statement. Investors are awaiting a new catalyst from the RBA press conference.
As expected, the Reserve Bank of Australia kept the official cash rate (OCR) unchanged at 4.35% at its fourth consecutive meeting on Tuesday. The statement noted that Australia’s inflation rate is slowing but remains high. Therefore, the Board expects that it will be some time before inflation remains within the target range on a sustained basis. The Reserve Bank of Australia further pointed out that the economic outlook remains uncertain and the central bank will not rule out any possibility in future decisions. The Australian dollar (AUD) is facing some selling pressure following the monetary policy meeting as the central bank did not show a hawkish bias as expected.
In the New Zealand dollar, the Reserve Bank of New Zealand (RBNZ) kept the cash rate unchanged at 5.5% for the sixth consecutive time at last month’s meeting, stressing that restrictive monetary policy was necessary to further reduce capacity pressure and reduce inflation. The RBNZ also signaled its intention to delay any shift to easing monetary policy until 2025 as inflationary pressures rose in the first quarter. This in turn may provide some support to the NZD and may limit the upside for AUD/NZD.
