The Australian dollar has dipped below 0.7200 handle in reaction to the RBA’s decision to leave official interest rates on hold for the 26th month in a row. Should traders expect the AUDUSD pair continue the downward trend?
2 October, OctaFX – The Aussie was little changed after the RBA’s monetary policy statement. The bank left interest rates unchanged at 1.75%. This was an expected move and is the reason why the Australian dollar made no major movements.
In a statement, the bank sounded upbeat about the economy and pledged to leave rates unchanged for some time. They believe that this will continue to support the economy. Part of the statement said:
Inflation is around 2 per cent. The central forecast is for inflation to be higher in 2019 and 2020 than it is currently. In the interim, once-off declines in some administered prices in the September quarter are expected to result in inflation in 2018 being a little lower than otherwise.
Australian Dollar Dips Below 0.7200
The AUDUSD pair was little moved after the RBA released the monetary policy statement. The pair is trading at 0.7229, which is in line with the 14-day moving average and at the middle band of the Bollinger Bands. It is also below an important support as shown below. With no major monetary change, the pair’s downward trend is likely to continue.
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