- AUD/USD price wavered following the latest decision by RBA.
- The bank did not tamper with interest rates at 0.10%.
- The pair might extend its bullish strength to 0.7400.
AUD/USD saw sideways actions early on Tuesday as traders responded to the latest decision by the Reserve Bank of Australia on interest rates. The pair trades around 0.7248, briefly beneath this week’s high at 0.7285.
The RBA ended its two-day seminar on Tuesday, doing what most experts expected. The bank did not alter its interest rates and warned on the effects of the Ukraine-Russia conflict on the global economy. Reserve Bank of Australia left cash rate aim at 10 points, the level it was within the previous few months. Moreover, the bank did not interfere with exchange settlements at 0.10%.
The statement from the bank shows the Australian economy performed well, unemployment rate hitting 24-year lows of 4.2%. The rate even improved from levels it was in pre-pandemic. Therefore, the situation might keep improving as Australia reopened its borders. The bank sees the rate falling beneath 4% before 2022 end.
Also, RBA anticipates lucrative performance by the salary growth index. Furthermore, the bank predicts high inflation amid increasing commodity costs due to the Ukraine-Russia war. It expects headline inflation to climb to roughly 3.75% in the upcoming quarters. Then, it will plunge to 2.75% in the coming year (2023).
Statement from the bank stated it might be challenging to tell whether inflation is within the targeted range though it picked up. There are concerns on how persistent inflation will pick up due to the ongoing supply-side and global energy market issues.
The 24hr chart shows AUD/USD kept upside trends over the previous few days even as Ukraine saw an invasion. The pair climbed beyond the 23.6% FIB retracement level. It also rose past the 25- and 50-day MAs as oscillators such as Stochastic and the Relative Strength Index pointed upside.
Therefore, AUD/UD can keep the upside moves as bulls aim the next resistance at 0.737-, matching the 38.2% FIB retracement zone.
What are your views on the ongoing war and the global economy? You can comment below.
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