The Australian Dollar fell sharply following the Reserve Bank of Australia’s (RBA) decision to keep interest rates steady, surprising markets that had anticipated a potential hike. The currency slid by more than 1% against the US Dollar, reflecting investor disappointment over the RBA’s cautious stance amid persistent inflation concerns. This marks the second consecutive pause, signaling a more restrained monetary approach compared to other central banks.
Adding to the volatility, traders are now shifting focus to the upcoming US Consumer Price Index (CPI) report, which could provide further insight into the Federal Reserve’s next policy moves. A stronger-than-expected CPI reading may bolster the US Dollar further, exacerbating the Australian Dollar’s weakness. Analysts caution that with both domestic and global inflation pressures in play, the AUD’s outlook remains precarious in the near term.
