Has AUDUSD Bottomed With RBA Being the Last Hawkish CB?

Most major central banks have turned dovish and are starting to cut interest rates, but not the RBA, which remains firm in its stance, keeping AUDUSD somewhat supported. They have been refraining from giving any signals of reducing interest rates soon. The RBA confirmed that in the last meeting, however, they also removed any doubts about a rate hike, while early today we had the RBA deputy governor Hunter hold a speech.

AUD/USD Chart Daily – AUD/USD Finding Support at 0.8550

After hitting new 2024 lows of 0.6349 on Monday, AUD/USD managed to regain some ground, rising above the 0.6500 level on Tuesday’s reversal, returning to the consolidation zone. This recovery was also supported by a rebound in commodity prices such as copper and iron ore.

AUD/USD Analysis Post-RBA Decision

Following the Reserve Bank of Australia’s (RBA) policy decision, AUD/USD found some bids after Governor Bowman mentioned that the board had considered raising interest rates. However, the Australian dollar is generally seen as a risk currency, and with China slowing down and stock markets experiencing volatility and declines, a risk-off sentiment prevails. These opposing forces have led to the recent consolidation around 0.65.

Looking ahead, the RBA is expected to be the last of the G10 central banks to start lowering interest rates. In contrast, the Federal Reserve’s potential medium-term easing could bolster AUD/USD in the coming months. However, the reaction of the Chinese economy remains crucial, given Australia’s economic sensitivity to developments in China.

RBA Assistant Governor Hunter Remarks

• Economy running a little hotter than the Reserve Bank of Australia thought previously

AUD/USD Live Chart