RBA SAYS STRONG AUSTRALIAN DOLLAR IS HOLDING BACK GDP GROWTH
The AUDUSD price sharply declined after the statement of the RBA on monetary policy. According to the statement, the key interest rate remained at 1.50% which coincides with the average forecast. The central bank also gave an optimistic outlook for the labour market despite the slow growth in wages.
The level of the consumer price index is likely to grow along with the expansion of the economy. The decline of the aussie was due to remarks concerning the negative impact of a strong Australian dollar on the pace of economic growth in the country. A hike to the key interest rate this year is unlikely and that is also putting pressure on the AUDUSD. Data on retail sales growth in Australia by 0.6% in May, against the forested 0.2% didn’t have much impact on the course of trading.
An additional reason for the fall of the pair was the strengthening of US dollar amid growing yields of Treasury bills in America. Breaking through 0.7600 may become a stimulus for a further drop to 0.7565 and 0.7520. The current price rebound may continue until 0.7635 because as the RSI on the 15-minute chart touched the oversold zone. Activity was low due to Independence Day celebrations in the US.