Australian Dollar : Hawkish hold keeps risks alive – TD Securities
TD Securities’ Prashant Newnaha and Alex Loo note that the Reserve Bank of Australia left the cash rate at 4.35% in a unanimous decision, with the Statement and updated forecasts sounding less hawkish than expected.
The Reserve Bank of Australia maintained the cash rate at 4.35% during a unanimous decision, leaving the Australian Dollar vulnerable to future interest rate hikes, according to TD Securities analysts Prashant Newnaha and Alex Loo. Governor Bullock hinted at the possibility of another rate increase if inflation risks on the upside arise, despite the Statement and updated forecasts appearing less hawkish than anticipated.
The RBA's decision to keep the cash rate unchanged has left the currency sensitive to incoming data and the bank's communications. While the forecasts suggest a reduced likelihood of a rate hike this year, the RBA has not ruled out future hikes, leaving the Australian Dollar exposed to risks until more definitive data is released.
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