MARKETS TREND
The market trend factors in multiple indicators, including Simple Moving Average, Exponential Moving Average, Pivot Point, Bollinger Bands, Relative Strength Index, and Stochastic.
AUD/USD is resuming the decline after the failure to break above 0.64, and will likely fall to 0.60 in April as trade tensions weigh.
RBA Rate April 1 Meeting
The Australian dollar (AUD) has been under sustained pressure against the US dollar (USD), with the AUD/USD pair declining nearly 8 cents in Q4 2024. The bearish momentum continued into early February, briefly pushing the pair below 0.61 before a temporary rebound occurred.
The recovery was triggered by a delay in US trade tariffs, allowing AUD/USD to climb above 0.64. However, the upside was short-lived, as the 20-week Simple Moving Average (SMA) acted as strong resistance, preventing further gains and pushing the pair lower once again.
AUD/USD Chart Weekly – The 20 SMA Rejected Buyers
Adding to the pressure, the US imposed a 20% tariff on Chinese imports, directly impacting Australia’s economy given its strong trade ties with China. The Australian dollar remains vulnerable as these trade tensions persist.
Meanwhile, Australia’s February Consumer Price Index (CPI) report showed a slight decline in inflation, reinforcing expectations that the Reserve Bank of Australia (RBA) may adopt a more dovish stance.
Headline CPI (YoY): 2.4% (slightly below the forecast of 2.5%, down from 2.5% in the previous reading).
Core Inflation (YoY – Trimmed Mean CPI): 2.7%, a marginal decline from 2.8%.
With a slowing inflation trend and external trade pressures weighing on the Australian economy, the AUD remains under pressure, making it difficult for the currency to stage a sustainable recovery against the USD.
The RBA’s cautious stance suggests that rate cuts are not imminent, as policymakers seek greater confidence in inflation trends before easing policy. While inflation is moderating, external risks—especially from geopolitical tensions and US tariffs—are key concerns. Markets will closely watch upcoming economic data to gauge whether the RBA’s stance will shift in the coming months.
RBA Holds Rates Steady Amid Growing Global Uncertainty
Key Monetary Policy Decision – April 2025
The Reserve Bank of Australia (RBA) kept its cash rate unchanged at 4.10%, in line with expectations.
Inflation is moderating, but policymakers remain cautious about the outlook.
The highest priority remains returning inflation to target in a sustainable manner.
The global economic landscape remains uncertain, with significant geopolitical risks.
Monetary policy remains restrictive, signaling that the bank is not yet ready to shift towards easing.
The RBA will rely on incoming data and risk assessment before making future policy decisions.
Insights from RBA Governor Bullock’s Press Conference
The May rate decision remains open-ended – the RBA has not made up its mind.
Key factors influencing future policy include inflation, the labor market, and US trade tariffs.
The RBA does not align with market expectations of rate cuts and is taking a more cautious stance.
Policymakers are in a “wait and see” mode, closely monitoring international risks and trade policies.
While the base case does not predict a recession, global uncertainty poses a major risk.
There isn’t much to examine in depth here. The RBA has maintained the status quo, and the statement’s key points align with their February communications. The important point is that they are restating the restrictive nature of monetary policy. Bullock also mentioned that they haven’t decided on the May decision, so things are still the same.
Skerdian Meta Lead Analyst.
Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank's local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.
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