AUD/USD slides nearly 1% amid risk-off sentiment – BBH

AUD/USD fell almost 1% despite the RBA holding rates at 3.60%, as risk-off sentiment outweighed the central bank’s hawkish pause and neutral policy guidance, BBH FX analysts report.

RBA holds cash rate at 3.60% unanimously

“AUD/USD is down almost 1% from yesterday’s high. Broad risk off market sentiment outweighs the tailwind to AUD from the RBA’s hawkish hold. As was widely expected, the RBA voted unanimously to leave the policy rate unchanged for a second straight meeting at 3.60%.”

“Importantly, the RBA signaled it plans to keep rates on hold for some time. The RBA projects underlying inflation to be above the 2–3% range in coming quarters and does not expect labor market conditions to ease much from here. RBA Governor Michele Bullock also suggested policy is in the right spot highlighting ‘we think we are pretty close to neutral…We don’t have a bias’.”