The Bank of Australia has decided to keep interest rates on hold at 4.1%, as expected, and the RBA has also maintained its status quo in its statement. The key detail is that bankers confirm that monetary policy remains tight and acknowledge that risks to the inflation outlook are still bilateral. However, this does not change the fact that money markets have become convinced that the central bank will cut rates by 25 basis points at its next meeting.
Governor Bullock said that the possibility of a rate cut was not discussed today and that the RBA has not yet made a decision on the 20 May meeting. The Australian CPI data is due on 30 April, so given the uncertainty surrounding tariffs, it seems likely that the RBA will use the time available to maintain an open stance on future decisions. However, in our view, this does not change the market’s assumption of a rate cut in May. This scenario is currently priced in at just over 75%. The probability has increased marginally since last Tuesday.
Source: Bloomberg Financial LP
What’s next for AUDUSD?
The pair is currently moving in a short-term uptrend, although in the long term the downtrend is still dominant. After the RBA decision, AUD is stabilizing at the lower support of the previously mentioned uptrend, although it seems that until the market clarifies a specific reaction to Trump’s tariff announcements, the spectrum of possibilities for sudden movements is still limited.
Despite Bullock’s relatively hawkish comments, markets have not changed their stance on the 75% possibility of a cut in May, which is why we believe that the reaction to Trump’s tariffs will be the weight shaping market volatility.
Source: xStation
The material on this page does not constitute financial advice and does not take into account your level of understanding, investment objectives, financial situation or any other specific needs. All information provided, including opinions, market research, mathematical results and technical analyzes published on the Website or transmitted To you by other means, it is provided for information purposes only and should in no way be construed as an offer or solicitation for a transaction in any financial instrument, nor should the information provided be construed as advice of a legal or financial nature on which any investment decisions you make should be based exclusively To your level of understanding, investment objectives, financial situation, or other specific needs, any decision to act on the information published on the Website or sent to you by other means is entirely at your own risk if you In doubt or unsure about your understanding of a particular product, instrument, service or transaction, you should seek professional or legal advice before trading. Investing in CFDs carries a high level of risk, as they are leveraged products and have small movements Often the market can result in much larger movements in the value of your investment, and this can work against you or in your favor. Please ensure you fully understand the risks involved, taking into account investments objectives and level of experience, before trading and, if necessary, seek independent advice.
