Australian dollar strengthens after RBA decision
Australian dollar strengthens after RBA decision
The Australian dollar (AUD) is trading higher on Tuesday following the Reserve Bank of Australia's (RBA) June monetary policy decision.
The RBA kept the official cash rate (OCR) at 4.35 per cent for the fifth consecutive meeting, despite raising it by 25 basis points last November. Michelle Bullock's hawkish stance, which ruled out the possibility of a rate cut, helped strengthen the Australian dollar, FX Street reported.
Investors are now awaiting economic data from the US, including retail sales and industrial production for May. Later in the day, Federal Reserve officials, including Lisa Cook and Thomas Barkin, are scheduled to speak, which could affect the US Dollar and, consequently, the AUD/USD pair.
Market factors affecting the Australian dollar exchange rate:
- The RBA Council decided to maintain the current policy to fight persistent inflation, while not ruling out a future rate hike.
- The New York Manufacturing Business Activity Index improved from -15.6 to -6.0 in June, beating expectations.
- Financial markets estimate the probability of a Fed rate cut on 18 September at 62%.
AUD/USD is now showing strength, trading above the 100-day exponential moving average (EMA). However, the bullish momentum is unsustainable and the 14-day Relative Strength Index (RSI) is below the 50 line, indicating potential selling pressure. Key support lies around 0.6580-0.6585, while resistance is at 0.6684 and 0.6715.
It is worth noting that market dynamics continue to evolve, and the future course of the Australian dollar will depend on both domestic economic policy and global financial developments.
At the time of writing, AUD/USD is trading at 0.6632, up 0.30% over the past 24 hours.
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