RBA Inaction Drags AUDUSD Lower

Published on Aug 01, 2023 11:42

Australian dollar loses momentum after the central bank leaves benchmark policy rate steady. RBA decided to pause rate hike to assess the impact of the increase in interest rates to date and the economic outlook, Governor Philip Lowe said. The policy board of the Reserve Bank of Australia decided to hold the cash rate target unchanged at 4.10 percent. AUDUSD pair snapped yesterday surge and is currently staying at 0.6680, down 0.7% on the day. Besides the inaction by the RBA, a firm dollar overseas coupled with weak data from China is further dampening the currency. China Caixin manufacturing PMI score came in at 49.2, which is down from 50.5 in June and it moves beneath the boom-or-bust line of 50 that separates expansion from contraction. Meanwhile, dollar index stays firm, renewing fresh three week highs at 101.74 supported by higher US benchmark treasury yields hovering near 4%.