Aussie-Dollar Gains after RBA Leaves Rates Unchanged in April
- Aussie Dollar climbed as much as 1% after RBA rate decision
- RBA leaves rates unchanged at 2.25%
- RBA says further easing may be appropriate over period ahead
The Australian Dollar climbed as much as 1 percent versus the US Dollar after the Reserve Bank left rates unchanged in April. The markets were pricing in a 70 percent chance that the bank would cut rates. While rates were left unchanged, they are still at record lows.
The bank judged that it was appropriate to hold rates for the time being. The RBA sees inflation consistent with the target over the next 1-2 years with growth below trend pace and spare capacity for some time yet. Policymakers added that a lower Australian Dollar is likely needed to achieve balanced growth. The RBA mentioned that further easing may be appropriate over the period ahead. The central bank’s tone is little changed from the March meeting, with further changes in monetary policy appearing to be data-dependent.
Currency Strategist Ilya Spivak says a daily close above the 14.6% Fibonacci retracement at 0.7733 exposes the 0.7857-7912 area (Feb 26 high). A reversal below the March 11 low at 0.7559 opens the door for a test of the 38.2% Fib expansion at 0.7421.