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Excessive RBA expectations were disappointed yesterday as the central bank failed to signal significant shifts in stance. Nevertheless, firming iron ore complex prevented too much AUD negativity as well. For now, the 0.7700 to 0.7800 range is set to dominate, in the view of economists at OCBC Bank.

Aussie still within the 0.77-0-78 range

“Comparing the latest RBA policy statement and the previous suggests that the Reserve Bank of Australia is not materially leaning any less dovish, leaving the AUD to pare down pre-RBA gains. Nevertheless, firming iron ore complex prevented too much AUD negativity as well.”

“RBA expectations may build again ahead of the 06 July meeting, but regardless, the RBA should be a laggard compared to the RBNZ in the 2022-2023 timeframe. This leaves some room for downside in the AUD/NZD.”

“The AUD/USD pair should remain locked within the 0.7700 to 0.7800 range, pending further developments on the Fed expectations front.”