AUD/USD Consolidates at 0.65 After RBA Bullock No Rate Cut Stance
The RBA continues to maintain a hawkish bias, with Governor Bullock repeating today that they’re not looking for rate cuts soon, which is bullish for AUD/USD, but this pair is consolidating around 0.65.
The AUD/USD exchange rate has struggled to maintain momentum above the 0.65 level, despite twice attempting to reclaim it. Each time, buyers have failed to sustain gains, leading the pair to slip back below this critical threshold. Over the past two months, the Australian dollar (AUD) has faced consistent downward pressure from a stronger US dollar (USD), with repeated short-lived recoveries unable to break the trend of declining highs.
AUD/USD Chart H4 – MAs Keeping the Trend Bearish
The Reserve Bank of Australia (RBA) emphasized its commitment to restrictive monetary policy in its meeting minutes. Today, RBA Governor Michele Bullock reinforced this stance, dismissing the possibility of rate cuts in the near term. She underscored the importance of maintaining elevated interest rates until inflation is firmly under control, signaling vigilance against potential inflationary pressures.
Key Remarks by RBA Governor Michele Bullock
On US Tariffs and Inflation:
- Uncertainty surrounds the Trump administration’s actions versus their statements.
- US tariffs may drive up US inflation but are unlikely to affect Australian inflation within the next six months.
Monetary Policy Approach:
- Decisions are based on known factors, avoiding speculation about uncertain developments.
- Underlying inflation remains too high to consider cutting rates in the near term.
- A restrictive policy stance will be maintained until greater confidence in inflation control is achieved.
Inflation Targets and Projections:
- Returning inflation to the target band sustainably is expected to take until 2026.
- The RBA aims for inflation at 2.5% but notes that progress is gradual.
- If inflation slows faster than anticipated, the RBA is prepared to respond accordingly.
Rate Cuts Considerations:
- A rate cut does not require inflation to be at the target but must demonstrate a clear trend toward it.
- Any renewed inflationary pressures would signal a need for caution and policy adjustment.
Current Stance:
- Rates will remain at current levels as the board monitors data and inflation trends.
- The priority is ensuring inflation continues its gradual path toward the target before easing policy.
AUD/USD Live Chart
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