AUD/USD fell after the Reserve Bank of Australia (RBA) removed its restrictive bias. The economists of Commerzbank analyze the prospects for the Australian dollar.
RBA removes explicit reference to further tightening
Interest rates remained unchanged at 4.35%. At the same time, the RBA dropped its suggestion that further tightening might be appropriate.
The next interest rate move is likely to be a cut thereof. However, this does not mean that it will occur in the near future. The RBA also noted that inflation in services is much more persistent. And high wage growth is only consistent with the inflation target if productivity growth picks up. In our opinion, the RBA therefore maintains its cautious approach.
It will likely be several months before the first rate cut is announced. The RBA is unlikely to cut rates until inflation falls more significantly. This is unlikely to happen until after the Fed, so The Australian dollar should rise again in the coming weeks.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
