- The Reserve Bank of Australia kept its policy rate unchanged at 0.1%.
- The US Dollar Index is holding on to modest daily gains above 92.30.
- The focus shifts to US ISM services PMI data.
After moving sideways in a very tight range on Monday, the pair AUD/USD It gained traction during Tuesday’s Asian session and reached its highest level in a week at 0.7599 before entering a consolidation phase. At time of writing, the pair was up 0.72% on the day at 0.7583.
RBA Policy Announcements Trigger AUD Rally
Earlier in the day, the Reserve Bank of Australia (RBA) announced that it left its policy rate unchanged at a record low of 0.1% in July, as largely expected. However, the RBA said it will reduce the amount of weekly bond purchases to A $ 4 billion from A $ 5 billion. This development provided a boost to the AUD.
In its policy statement, the RBA reiterated that it remains committed to preserving highly favorable monetary conditions, noting that it will not increase the cash rate until real inflation is sustainably within the 2-3% range.
In the press conference after the monetary policy meeting, RBA Governor Phillip Lowe noted that they are unlikely to raise the cash rate before 2024.
On the other hand, the US Dollar Index is posting modest daily gains above 92.30 ahead of the ISM Services PMI report and keeping the AUD / USD rise limited for the time being.
Technical levels
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