- The past couple of days saw AUD/USD bouncing back.
- The RBA raised interest rates on Tuesday.
- The central bank’s move would likely see the pair retesting 68 cents.
Monday sessions saw AUD/USD price tilting upside as market players concentrated on awaited interest rate move by RBA (Reserve Bank of Australia). While publishing this content, the pair changed hands at a few points beyond the previous week’s low at 0.6767.
RBA Rate Decision
Market players concentrated on the AUD-USD exchange rate early on Tuesday due to the monetary decision by the Reserve Bank of India. The bank’s move is crucial for the nation’s (Australia) economy.
The latest data confirmed that the Australian economy began to deteriorate amidst surging inflations. Business and consumer confidence have plunged, impacting retail spending.
Furthermore, soaring mortgage rates have seen house trends fading even with property prices remaining elevated. Last week’s report showed that more than seventy financial institutions imposed rate hikes.
Moreover, commodity prices have begun plunging amid surging global recession fears. For instance, Australia’s coal prices have declined as consumers purchase cheap products from Russia and Indonesia.
Meanwhile, the Reserve Bank of India has hiked rates for the 3rd consecutive meeting. The central bank increased rates by 0.50%, and analysts believe more rate increases in the upcoming months.
The bank will resort to rate hikes to control the surging consumer inflation. The latest data indicated an upswing beyond 5% for Australian inflation. Moreover, the RBA warned prices could climb to 7% later in the year.
However, some signals confirm inflation can begin dropping. For instance, oil prices have plummeted from their yearly highs, whereas the BCI (Bloomberg Commodity Index) fell by more than 10% from June highs.
The US NFP (non-farm payrolls) would be AUD-USD’s next catalyst. Analysts believe these figures display that the nation’s labor market relaxed in June.
According to the 4hr chart, the AUD-USD rebounded from its lowest market last week. The pair climbed towards its highs of 0.688 since Wednesday’s low.
Moreover, it moves inside the 25- and 50-day MAs as the RSU maintained upside. Finally, the pair has resorted to bearish moves following the RBA rate decision. Investors should watch the 0.6800 mark.