Abstract:The Australian dollar is rapidly depreciating against the US dollar on Tuesday. The current AUDUSD exchange rate stands at 0.6324.
The Australian dollar is rapidly depreciating against the US dollar on Tuesday. The current AUDUSD exchange rate stands at 0.6324.
During today's meeting, the Reserve Bank of Australia left the interest rate unchanged at 4.1% per annum. In its comments, the RBA emphasised that there may be a need for future monetary policy tightening.
This marks the fourth consecutive time that the interest rate has remained unchanged, aligning with expectations. A sudden transformation in economic data would be necessary for the RBA to swiftly change its stance.
As noted by the RBA, monetary policy tightening may be needed to ensure that inflation returns to the target within a reasonable time. However, this will continue to depend on the forthcoming statistical data and evolving risk assessments.
According to current expectations, the likelihood of an interest rate hike at the November meeting is less than 30%.
The AUD exchange rate is declining due to pressure from the US dollar and the interest rate spread.
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Wednesday's major data releases and macroeconomic events are expected to cause volatility to increase after another day of erratic trading in the financial markets. The Spring Budget for the UK will be released, and January Retail Sales figures for January will be made available by Eurostat. ADP Employment Change for February and January JOLTS Job Openings will be discussed later in the session on the US economic docket.
Major currency pairings are still trading in familiar ranges early on Tuesday after the erratic trading on Monday. The US economic docket for the American session will include the factory orders data for January and the ISM Services PMI survey for February. Final updates to the February PMI for the US, Germany, the UK, and the EU will also be released by S&P.
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