forex forum binary options trade - Forex - Australian dollar shrugs after RBA minutes
  • Welcome to forex forum binary options trade. Please login or sign up.

Australian dollar shrugs after RBA minutes

Started by PocketOption, May 28, 2024, 04:44 am

Previous topic - Next topic

0 Members and 1 Guest are viewing this topic.


Australian dollar shrugs after RBA minutes


The Australian dollar edged lower but recovered in the Asian session. AUD/USD is showing little movement in the European session, trading at 0.6660.

RBA minutes: members discussed rate hike

The minutes of the Reserve Bank of Australia's meeting earlier this month indicated that members discussed the possibility of a rate hike before deciding to hold the cash rate at 4.35% for a fourth consecutive time. This was old news which already known after the meeting and the Australian dollar's reaction has been muted.

The minutes noted that the risks around the RBA's forecasts were "balanced", which would indicate that members will continue the "higher for longer" stance. The RBA doesn't expect inflation to fall back to the 2-3% target until late 2025, which would likely mean that rate cuts won't be on the table before mid-2025. This could change, however, if inflation hits the target earlier than expected.

Governor Bullock has pushed back against speculation of near-term easing but some analysts expect an initial rate cut before the end of the year. The RBA has refrained from providing forward guidance and has stressed that its rate path will be determined by data.

Australia's Westpac Consumer Sentiment was a disappointment, declining by 0.3% in May to 82.4, following a 2.4% slide in April. This missed the markets estimate of a 0.9% gain and marked a third straight decline. Consumers are being squeezed by high interest rates and stubborn inflation and are pessimistic about the economy. Consumer confidence remains well below 100, which separates optimism from pessimism.

The Federal Reserve continues to pump out a message of caution about rate cuts. On Monday, Fed Vice Chair Philip Jefferson said that it was too early to tell if the downtrend in inflation would be "long lasting". Fed Vice Chair of Supervision Michael Barr said that first-quarter inflation data was disappointing and was not supportive of easing monetary policy.

AUD/USD Technical

AUD/USD has support at 0.6633 and 0.6611

0.6745 and 0.6797 are the next resistance lines





Source: Australian dollar shrugs after RBA minutes