Ella 
The Australian dollar extended gains against the U.S. dollar for a second consecutive session on Wednesday. This is largely due to the Reserve Bank of Australia’s monetary policy decision on Tuesday. The Reserve Bank of Australia has kept the Official Cash Rate (OCR) at 4.35% for the sixth time.
Reserve Bank of Australia governor Michele Bullock highlighted the ongoing risk that inflation may take too long to return to target, noting that interest rates may need to remain higher for an extended period. Bullock said lowering the cash rate in the short term was not consistent with current strategy.
However, inflation data for the second quarter reduced expectations that the Reserve Bank of Australia will raise interest rates again. Markets expect the Reserve Bank of Australia to cut interest rates in November, much earlier than previously forecast for April next year.
The AUD/USD currency pair is likely to strengthen further as the greenback comes under pressure on expectations of an aggressive interest rate hike from the Federal Reserve after weak U.S. jobs data in July stoked fears of a looming U.S. recession.
