AUD/USD Fell Below 0.6600 After The Reserve Bank Of Australia Announced Its Interest Rate Decision

On Tuesday, the AUD/USD fell by about 0.42% after the Reserve Bank of Australia announced its monetary policy decision to keep interest rates unchanged. However, the decision was viewed as dovish by the market. As a result, AUD/USD closed near the day’s lows, with AUD/USD trading at 0.6591, down 0.09% after the Asian market opened on Wednesday.

Wall Street ended mixed, with the dollar closing higher despite falling U.S. Treasury yields.

The Reserve Bank of Australia’s decision to keep the cash rate at 4.35% was a major motivation for AUD/USD traders. The Reserve Bank of Australia’s monetary policy statement was revised from March, when it acknowledged that inflation was slowing less than expected, when it said inflation was cooling but remained high. This was regarded as dovish by the market, and the market quickly adjusted the Reserve Bank of Australia’s monetary policy bias from neutral to slightly dovish.

In the United States, the market is discussing when the Federal Reserve will cut interest rates. Following the Fed’s decision to keep interest rates on hold, the U.S. central bank mentioned that risks to achieving its dual mandate of employment and inflation have “moved toward a better balance over the past year,” suggesting that sudden weakness in the labor market could open the door to a rate cut. door.

In the absence of economic data, the focus will be on speeches from Fed officials. The dollar strengthened after Minneapolis Fed President Neel Kashkari said the central bank could stay on hold on interest rates and leave the door open to raising the federal funds rate if inflation does not resume its downward trend.

Meanwhile, the CME FedWatch tool showed that the odds of the Fed cutting interest rates by 25 basis points in September rose to 85% at press time from 55% last week.

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