Forex Today: Aussie rallies on unexpected RBA hike, US Dollar edges lower


Here is what you need to know on Tuesday, June 6:

The Australian Dollar outperforms its rivals early Tuesday following the Reserve Bank of Australia's (RBA) unexpected decision to raise the policy rate by 25 basis points to 4.1%. The US Dollar struggles to find demand as markets see a growing possibility of the Federal Reserve (Fed) leaving its key rate unchanged at the next meeting. Retail Sales from the Euro area and the IBD/TIPP Economic Optimism Index from the US will be featured in the economic calendar

For the second meeting in a row, the RBA went against the market expectation and opted for an increase in its policy rate. In its policy statement, the RBA reiterated that the board remains resolute in its determination to return inflation to target and added that some further tightening of monetary policy may be required. AUD/USD rose sharply during the Asian trading hours and was last seen rising more than 0.5% on the day above 0.6650.

RBA: Some further tightening of monetary policy may be required.

On Monday, the ISM Services PMI report revealed a loss of momentum in the service sector's growth in May. Additionally, the publication showed a contraction in the sector's employment alongside a softening of input inflation. In turn, the US Dollar Index (DXY) came under renewed bearish pressure and erased its gains to close the day flat. In the European morning, DXY stays in negative territory slightly below 104.00 and the benchmark 10-year US Treasury bond yield consolidates Monday's losses at around 3.7%.

EUR/USD stage a late rebound on Monday and closed the day above 1.0700. Early Tuesday, the pair moves up and down in a tight range amid a lack of fresh catalysts. While speaking before the European Parliament in Brussels on Monday, European Central Bank (ECB) President Christine Lagarde reiterated that there was no clear evidence that underlying inflation has peaked.

GBP/USD erased the majority of its daily losses in the American session on Monday. The pair stays flat slightly below 1.2450 in the European session.

Gold price benefited from falling US yields on Monday and registered modest daily gains. Early Tuesday, XAU/USD fluctuate in a narrow channel near $1,960.

USD/JPY broke below 140.00 on Monday and extended its slide toward 139.00 during the Asian trading hours on Tuesday. Bank of Japan Governor Kazuo Ueda said earlier in the day that the Quantitative and Qualitative Monetary Easing (QQE) will continue until they achieve the inflation target.

Bitcoin came under heavy selling pressure and lost more than 5% on Monday. BTC/USD consolidates its losses near $25,800 on Tuesday. Ethereum stays dangerously close to $1,800 in the European morning after having decline 4% on Monday.

Share: Feed news

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


Recommended content

Editors’ Picks

EUR/USD declines toward 1.0800 on renewed USD strength

EUR/USD declines toward 1.0800 on renewed USD strength

EUR/USD stays on the back foot and declines toward 1.0800 following the modest rebound seen after German inflation data. The risk-averse market atmosphere, as reflected by the bearish action in Wall Street, supports the USD and weighs on the pair.

EUR/USD News

GBP/USD extends slide to 1.2700 area as mood sours

GBP/USD extends slide to 1.2700 area as mood sours

After moving sideways near 1.2750 in the European session, GBP/USD came under modest bearish pressure and dropped toward 1.2700. The negative shift seen in risk mood allows the USD to stay resilient against its rivals and drags the pair lower.

GBP/USD News

Gold pressures daily lows around $2,340

Gold pressures daily lows around $2,340

Gold trades in negative territory near $2,340 after closing the previous three trading days higher. The benchmark 10-year US Treasury bond yield gains more than 1% on the day above 4.6%, causing XAU/USD to continue to stretch lower.

Gold News

Bitcoin bull market is still going strong, on-chain data shows

Bitcoin bull market is still going strong, on-chain data shows

Bitcoin’s (BTC) price outlook remains positive in the short term despite its recent stabilization, on-chain data suggests, propelled by easing selling pressure by long-term holders and activity from large-wallet investors. 

Read more

Big moves ahead: ECB’s interest rate cut and the future of EUR/USD

Big moves ahead: ECB’s interest rate cut and the future of EUR/USD

The European Central Bank is set for a major move: an interest rate cut in June. This decision, backed by top officials like ECB Vice President Luis de Guindos and French central bank chief Francois Villeroy de Galhau.

Read more

Forex MAJORS

Cryptocurrencies

Signatures