The Australian Dollar goes seven weeks without a central bank
AUD/USD trades just above 0.7050 on Tuesday August 11, a tenth of a percent firmer inside a 29-pip range, having taken the Reserve Bank of Australia (RBA) decision entirely in its stride.
The Australian Dollar traded near 0.7050 on August 11, following a Reserve Bank of Australia (RBA) decision that left the cash rate unchanged at 4.35%. The board published new quarterly forecasts, but the currency showed little reaction to the announcement. The next RBA meeting is scheduled for September 29, while the Federal Reserve's next meeting occurs on September 16, leaving a seven-week gap.
Throughout this period, only the Fed would have the opportunity to address potential changes in interest rates, creating a risk for the Australian Dollar. The RBA expects inflation to return to the midpoint of its target band only by late 2027, while unemployment is projected to rise from 4.5% to 4.8% by the end of 2028. The RBA's decision to maintain higher interest rates is attributed to the impact of the ongoing energy crisis, which is driving up costs for Australian exporters.
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