The AUD/USD currency pair is witnessing a decline following comments made by the Reserve Bank of Australia (RBA). The Australian dollar is losing ground against the US dollar, with the current quote at 0.6803.

Investor confusion arose from the release of the RBA’s meeting minutes, which discussed the possibility of suspending the ongoing monetary tightening cycle. However, the central bank ultimately decided against it. The primary reason behind this decision was the tight labor market and the contentious situation surrounding national inflation.

The RBA carefully assessed the risks associated with an unexpected rise in the Consumer Price Index (CPI) as well as a potential surge in housing prices. These factors formed the basis for considering further increases in credit costs.

At present, the interest rate is at its highest level since April 2012, standing at 4.1% per annum.

Investors did not interpret the meeting minutes as entirely hawkish. They recognized the RBA’s uncertainty and willingness to take prompt action while considering the accumulated risks.

Nonetheless, subdued inflation forecasts have exerted pressure on the AUD. Overall inflation currently sits around 7%, and it is not anticipated to reach the target range of 2-3% until mid-2025.

The post AUD/USD Experiences Decline on 20.06.2023 appeared first at R Blog – RoboForex.