- Reserve Bank of Australia left its policy rate unchanged at 0.1%.
- US Dollar Index clings to modest daily gains above 92.30.
- Focus shifts to ISM Services PMI data from the US.
After moving sideways in a very tight range on Monday, the AUD/USD pair gained traction during the Asian session on Tuesday and reached its highest level in a week at 0.7599 before going into a consolidation phase. As of writing, the pair was up 0.72% on a daily basis at 0.7583.
RBA policy announcements trigger AUD rally
Earlier in the day, the Reserve Bank of Australia (RBA) announced that it left its policy rate unchanged at a record low of 0.1% in July as largely expected. However, the RBA said that it will reduce the amount of weekly bond purchases to A$4 billion from A$5 billion. This development provided a boost to the AUD.
In its policy statement, the RBA reiterated that it remains committed to preserving highly supportive monetary conditions and noted that it will not raise the cash rate until actual inflation is sustainably within the 2-3% range.
Speaking at the post-monetary policy meeting press conference, RBA Governor Phillip Lowe noted that they are unlikely to raise the cash rate before 2024.
On the other hand, the US Dollar Index is posting modest daily gains above 92.30 ahead of the ISM Services PMI report and keeping AUD/USD's upside limited for the time being.
ISM Services PMI Preview: Why the inflation component could trigger a dollar rebound.
Technical levels to watch for
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
Australian Dollar remains tepid after mixed Chinese data, Fedspeak awaited
The Australian Dollar extends its losses after mixed economic data from China on Friday. The Australian Dollar struggles as Australia’s 10-year bond yield has dropped to a monthly low of 4.2%. China’s Retail Sales increased for the consecutive 15th month but the softest gain in this sequence. The US Dollar has rebounded as the Fed remains cautious about inflation and potential rate cuts in 2024.
EUR/USD: Could FOMC Minutes provide fresh clues?
The EUR/USD pair advanced for a fourth consecutive week, comfortably trading around 1.0860 ahead of the close. Progress had been shallow, as the pair is up roughly 250 pips from the year low of 1.0600 posted mid-April.
Gold looks to extend uptrend once it confirms $2,400 as support
Gold price continued to push higher last week and rose above $2,400 on Friday, gaining nearly 2% for the week. Investors will continue to scrutinize comments from Fed officials this week and look for fresh hints on the timing of the policy pivot in the minutes of the April 30-May 1 meeting.
AI tokens could really ahead of Nvidia earnings
Native cryptocurrencies of several blockchain projects using Artificial Intelligence could register gains in the coming week as the market prepares for NVIDIA earnings report.
Week ahead: Flash PMIs, UK and Japan CPIs in focus. RBNZ to hold rates
After cool US CPI, attention shifts to UK and Japanese inflation. Flash PMIs will be watched too amid signs of a rebound in Europe. Fed to stay in the spotlight as plethora of speakers, minutes on tap.