The Reserve Bank of Australia left the main interest rate unchanged at 2.50% and also repeated the stance that “the most prudent course is likely to be a period of stability in interest rates”, a wording it introduced in February.
However, the recent consolidation and uptick in the value of the Australian dollar was not ignored: the statement included wording about the Aussie being “historically high” – a reference to the currency disappeared in early January. The instinct reaction was a drop in AUD/USD to 0.8920, but the fall was short lived. It seems that the RBA wants to keep the pair at least under 0.90.
One of things supporting the Aussie dollar was an earlier release or stronger than expected building approvals rise: 6.8% instead of 0.7% predicted.
Support awaits at 0.8910 and resistance is clear at 0.90. For more lines and analysis, see the AUDUSD forecast.
The recent rise in the Australian unemployment rate was also mentioned, and in context to the exchange rate:
Looking ahead, the Bank expects unemployment to rise further before it peaks. Over time, growth is expected to strengthen, helped by continued low interest rates and the lower exchange rate. Inflation is expected to be consistent with the 2-3 per cent target over the next two years.
There are more important figures awaiting the Australian dollar with the Gross Domestic Product standing out.
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