Australian Dollar sticks to post-RBA losses; struggles near two-week low despite weak USD
The AUD/USD pair sticks to the Reserve Bank of Australia (RBA)-inspired losses, trading near the 0.6980-0.6975 region, down around 0.15% for the day, during the second half of the Asian session on Tuesday.
The Reserve Bank of Australia (RBA) recently hiked its interest rate by 25 basis points to 4.85%, its highest level since 2008. However, Prashant Newnaha from TD Securities views this move as a conditional pause rather than the start of another tightening cycle. The RBA's decision was not unanimous, with three members favoring to keep rates at 4.60%.
This, along with a softer outlook on growth, suggests that the RBA may hold rates for an extended period. Newnaha expects the earliest rate cut to occur in November 2027, but an earlier cut could be possible if unemployment and housing activity deteriorate sharply. As a result, Newnaha anticipates the Australian Dollar (AUD) to underperform into the year-end.
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