Australian Dollar declines against New Zealand Dollar following RBA decision

AUD/NZD falls as the Australian Dollar weakens following the Reserve Bank of Australia's latest interest rate decision.
The RBA kept the Official Cash Rate unchanged at 4.35% for the second consecutive meeting.
New Zealand Prime Minister Christopher Luxon called an urgent caucus meeting Wednesday to address growing speculation about his leadership.

Akhtar Faruqui FXStreet

AUD/NZD pares its daily gains, trading around 1.1960 during the Asian hours on Tuesday. The Australian Dollar (AUD) has drifted lower following the Reserve Bank of Australia’s (RBA) latest monetary policy decision, keeping the currency cross on a weaker footing. As widely anticipated by financial markets after second-quarter inflation figures came in lower than projected, the RBA opted to leave the Official Cash Rate unchanged at 4.35% for its second consecutive meeting.

RBA statement eyed for fresh guidance on inflation and growth

Brown Brothers Harriman’s Elias Haddad highlighted that the communications will be critical, noting that “The RBA’s August Statement on Monetary Policy will shed light on the bank’s inflation and growth outlook.” This detailed update is expected to help investors refine their views on how long the RBA can sustain its current hawkish stance and what that implies for the Australian Dollar’s carry appeal over the remainder of the year.

Meanwhile, central bank policy across the Tasman faces its own set of complications. Rising oil prices, driven by uncertainty over the potential reopening of the Strait of Hormuz, have sparked fresh debate on how the Reserve Bank of New Zealand (RBNZ) might approach its September policy meeting. Markets are exercising caution ahead of New Zealand’s third-quarter inflation expectation figures, particularly after the Q2 data showed an unexpected acceleration.

Compounding the regional uncertainty, New Zealand Prime Minister Christopher Luxon has called an urgent, in-person caucus meeting for Wednesday morning to confront growing speculation surrounding his leadership. Following a turbulent week marked by reports of MPs receiving calls about a potential leadership challenge, Luxon is acting decisively to suppress internal dissent before it metastasizes into a campaign-defining issue for the National Party.

Economic Indicator

RBA Interest Rate Decision

The Reserve Bank of Australia (RBA) announces its interest rate decision at the end of its eight scheduled meetings per year. If the RBA is hawkish about the inflationary outlook of the economy and raises interest rates it is usually bullish for the Australian Dollar (AUD). Likewise, if the RBA has a dovish view on the Australian economy and keeps interest rates unchanged, or cuts them, it is seen as bearish for AUD.

GBP/USD clings to gains; US CPI in focus

The British Pound holds onto two-day gains marginally at around 1.3500 against the US Dollar during the Asian trading session. The GBP/USD pair remains firm as the British Pound outperforms despite financial markets pricing out the possibility of an interest rate hike by the Bank of England in the near term.

EUR/USD flat lines near mid-1.1500s as traders await US CPI amid Iran uncertainty

The EUR/USD pair struggles to gain any meaningful traction, and holds steady around the 1.1545-1.1550 area during the Asian session. Traders seem hesitant to place aggressive bets and opt to wait for further developments surrounding the Middle East crisis and this week's release of the latest US inflation figures.

Gold surges past $4,400, hitting fresh two-month highs

Gold climbs further beyond $4,400, touching its highest level since June 5 in the Asian session on Tuesday. Easing Fed rate hike expectations continue to drive flows towards the non-yielding bullion. Meanwhile, inflation risks stemming from volatile oil prices back the case for at least one rate hike in 2026, which supports the US Dollar and might cap the precious metal ahead of the crucial US CPI report on Wednesday.

Bitcoin softens on institutional selling – CRV, ICP outperform

The broader cryptocurrency market shows mixed sentiment as Bitcoin (BTC) drops to $64,000 under institutional selling pressure. The Fear and Greed Index at 37, down from 40 the previous day, signals renewed bearish pressure. Meanwhile, Curve DAO (CRV) and Internet Computer (ICP) continue to extend their gains so far this week, emerging as top performers over the last 24 hours.

Dogecoin: Bullish divergence, whale accumulation support recovery hopes

Dogecoin shows early signs of a potential recovery, trading near $0.070 on Tuesday as bullish momentum divergence suggests selling pressure may be fading. In addition, whale accumulation and improving derivatives metrics suggest a bullish outlook, hinting at a potential recovery ahead.

9-3: Is the Federal Reserve’s vote tally Warsh's new forward guidance?

The rate did not move. Neither did the statement, and that’s the more interesting fact. Set the July 29 Federal Open Market Committee (FOMC) statement beside the one issued on June 17, and the two documents are identical apart from a single verb and a paragraph at the bottom naming three dissenters.