Anna 
Analysts at TD Securities have evaluated the Reserve Bank of Australia’s (RBA) recent policy decisions and anticipate implications for the Australian Dollar (AUD) against the US Dollar (USD).
The RBA opted to maintain the target cash rate at 4.35%, aligning with market expectations. However, the accompanying Statement and Press Conference did not deliver the anticipated hawkish stance anticipated by analysts at TD Securities and the broader market. Notably, the Bank revised its CPI forecasts for the year upward significantly, setting a high threshold for any rate hikes by the RBA by its August meeting. While the RBA has not ruled out potential rate increases, the decision to leave longer-term trimmed mean inflation forecasts unchanged suggests a stance of maintaining the cash rate for an extended period. According to forecasts, the earliest possible rate hike by the RBA could be in August 2025, if not later.
In response to today’s decision, TD Securities analysts anticipate potential profit-taking among AUD bulls across currency pairs, particularly considering the recent strong performance of AUD against currencies like the New Zealand Dollar (NZD) and the Canadian Dollar (CAD).
Given the RBA’s cautious approach toward hawkish actions, TD Securities predicts that AUD/USD will face resistance below the 0.6600 level, with a projected decline toward 0.6400 by the end of June. Additionally, TD Securities forecasts further strength in the USD across global foreign exchange markets, driven by increasing attention to inflation trends.
