The interest rate in Australia remains at 2.75% as widely expected. The Reserve Bank Australia did leave the door ope for further monetary easing if needed.
AUD/USD dipped below 0.97 but recovered quickly. The pair stands at 0.9718 before the European open.
The central bank did refer to the exchange rate of the A$, by saying the value of the currency remains elevated considering the decline in export prices. The recovery of AUD/USD towards the rate decision might have had an impact.
Here is the quote regarding the exchange rate, from the official statement:
The exchange rate has depreciated since the previous Board meeting, although, as the Board has noted for some time, it remains high considering the decline in export prices that has taken place over the past year and a half
The inflation outlook will provide more room for easing, in order to support demand. Growth has been below trend. The pace of borrowing has remained subdued. Regarding growth, Australia will publish GDP figures for Q1. Here is how to trade the Australian GDP with AUD/USD.
Earlier, Australia’s current account for Q1 showed a slightly smaller than expected deficit: 8.5 billion versus 8.9.The pair dropped from the highs of around 0.9770 towards 0.97-0.9710 before the rate decision.
The rate decision sent it as low as 0.9688 but it recaptured 0.97 quickly.
For more about the Aussie, see the AUD/USD forecast. Live 30 minute chart:
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