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  • RBA kept rates unchanged as expected and also retained neutral  stance, leaving the doors open for a move higher in the AUD.  
  • The Aussie, however, is struggling to pick up a strong bid. The yield differentials have barely moved post-RBA.  

The AUD/USD pair trimmed losses by 10 pips after the Reserve Bank of Australia (RBA) kept rates unchanged at 1.5 percent as expected.  

The central bank reiterated that low rates continue to support the Australian economy and the progress in wage-price inflation will be gradual. It added further that unchanged policy is consistent with meeting the consumer price inflation target over time and cited household indebtedness and global trade tensions key risks to the economy.  

All-in-all, the RBA stuck to the script contradicting hopes that central bank would change the language to better reflect the recent dovish talk by Governor Lowe.  

The Aussie, therefore, has room to erase daily losses with a move above 0.7097. So far, however, the Australian currency hasn’t found takers. Also, the spread between the Aussie and US 10-year government bond yields remains largely unchanged on the day at -55 basis points.  

As of writing, AUD/USD is trading at 0.7077, having clocked a high of 0.7089 soon after the RBA rate decision.  

Technical levels