AUD/USD rises slightly to near 0.6500 as the RBA delivers a hawkish interest rate guidance.
The near-term outlook of the US Dollar remains uncertain on firm Fed rate-cut prospects.
Investors see the Fed reducing interest rates by 50 bps in September.
The AUD/USD pair gains slightly to near the psychological figure of 0.6500 in Tuesday’s New York session. The Aussie asset moves higher despite a sharp recovery in the US Dollar (USD), suggesting sheer strength in the Australian Dollar (RBA) in the aftermath of monetary policy announcement by the Reserve Bank of Australia (RBA).
The RBA left its Official Cash Rate (OCR) unchanged at 4.35% for the sixth time in a row, as expected. However, the RBA delivered hawkish guidance on interest rates as price pressures are significantly higher than bank’s target of 2%. The Australian Consumer Price Index (CPI) accelerated to 3.8% in the second quarter on an annualized basis.
In the monetary policy statement, the RBA said, “Inflation in underlying terms remains too high, and the latest projections show that it will be some time yet before inflation is sustainably in the target range. Data have reinforced the need to remain vigilant to upside risks to inflation and the Board is not ruling anything in or out,” Reuters reported.
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