RBA does NOT cut – AUD/USD bounces (for now)
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RBA does NOT cut – AUD/USD bounces (for now)

The Reserve Bank of Australia left the interest rate unchanged at 2.25%, refraining from a second consecutive cut.

This surprising move (well, it seems that  some knew about the move seconds before)  sent AUD/USD shooting up above 0.78. Is this a definitive comeback or a sell opportunity?

The RBA said that it is appropriate to hold rates steady for the time. This comes despite seeing growth continuing below trend pace and weak growth in domestic demand. Subdue labor cost growth is set to keep overall inflation in target.

However, it did say that it will assess the case for easing at the forthcoming meetings.

What about the Australian dollar? It said a further fall in the exchange rate is needed to balance growth.

All in all: the RBA held now but may  cut later.

Earlier, data released from  Australia came out better than expected: building approvals  jump 7.9% against a drop of 1.8% expected. The current account deficit squeezes to 9.6 billion from 12.1 billion and 10.9 billion expected. And, the average cash earnings rose by 1.3%  instead of 0.6% predicted.

More:  Australian Dollar: Up, Down or Indecision?

Here is how the jump looks on the AUD/USD 30 minute chart:

AUDUSD rising March 3 2015 after RBA decided to leave rates unchanged Stevens surprise


Yohay Elam

Yohay Elam

Yohay Elam: Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I've accumulated. After taking a short course about forex. Like many forex traders, I've earned a significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I've worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts.