AUDUSD Pair Hits Three Week High As RBA May Pursue Some Further Tightening

Published on Jul 12, 2023 15:43

The AUDUSD pair edged up to 0.6750- hitting around three week high before moderating as markets eyed latest comments from Philip Lowe, the Governor of the Reserve Bank Of Australia (RBA). Lowe noted in a speech today that RBA monetary policy board decided to hold the cash rate target unchanged at 4.1 per cent. This decision will provide the Board with more time to assess the state of the economy and the economic outlook and associated risks. The decision to hold interest rates steady this month follows a cumulative increase of 4 percentage points since May last year. This is a significant and rapid tightening of monetary policy. The Board is very conscious that monetary policy operates with a lag and that the full effects of the tightening to date have not yet been felt. It remains to be determined whether monetary policy has more work to do. It is possible that some further tightening will be required to return inflation to target within a reasonable timeframe. Whether or not this is required will depend on how the economy and inflation evolve, he noted.