4 Feb 2014
AUD/USD rally slows after post-RBA surge
FXStreet (London) - AUD/USD is showing some fatigue after a strong rally overnight on the Reserve Bank of Australia’s rate announcement.
Although the RBA kept rates held at 2.5 percent as expected, it shifted its tone drastically, removing its easing bias and emphasis on the AUD being “uncomfortably high” unlike in previous months.
Shifting stance from RBA
In place of easing bias, the statement accompanying the rate decision said that there is “likely to be a period of stability in interest rates”.
"In the Board's judgement, monetary policy is appropriately configured to foster sustainable growth in demand and inflation outcomes consistent with the target," said RBA governor Glenn Stevens in the statement.
AUD/USD crept up ahead of the rate announcement to USD0.8760. However, the shift in language from the RBA sent AUD surging, climbing 1.63 percent to a peak of USD 0.8914. The pair is currently trading at USD0.8886.
Although the RBA kept rates held at 2.5 percent as expected, it shifted its tone drastically, removing its easing bias and emphasis on the AUD being “uncomfortably high” unlike in previous months.
Shifting stance from RBA
In place of easing bias, the statement accompanying the rate decision said that there is “likely to be a period of stability in interest rates”.
"In the Board's judgement, monetary policy is appropriately configured to foster sustainable growth in demand and inflation outcomes consistent with the target," said RBA governor Glenn Stevens in the statement.
AUD/USD crept up ahead of the rate announcement to USD0.8760. However, the shift in language from the RBA sent AUD surging, climbing 1.63 percent to a peak of USD 0.8914. The pair is currently trading at USD0.8886.