Skip to content AUDUSD Fundamental Analysis – 6-August-2024
On Tuesday, the Australian dollar remained steady above $0.651 (AUD/USD). This stability came after the Reserve Bank of Australia (RBA) decided to keep the cash rate unchanged at 4.35% for the sixth consecutive meeting, a decision widely anticipated by the market.
However, despite the steady rates, the RBA warned that inflation is still too high and decreasing slower than expected. This situation has alerted the board for potential rising inflation risks.
The central bank noted a more robust outlook for domestic demand. This is mainly due to increased public spending and a recovery in household consumption, which contribute to economic growth. The Australian dollar dropped significantly on Monday, falling to as low as $0.635.
This drop was influenced by growing fears of a potential recession in the United States and a significant unwinding of yen carry trades, which caused turbulence in the financial markets. However, the Aussie recovered almost all those losses by Tuesday.
- Also read: GBPUSD Fundamental Analysis – 6-August-2024
Meanwhile, the local currency found some support from expectations that the Federal Reserve in the US might need to cut interest rates more aggressively. This expectation helped stabilize the sentiment around the Australian dollar.
Additionally, the financial situation in Japan showed signs of stabilizing, which also supported the Aussie dollar. Overall, while the RBA’s decision to keep rates steady was expected, the ongoing concerns about inflation and global economic stability continue to impact the Australian dollar.
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