The Australian dollar is in positive territory after a three-day skid. In the North American session, AUD/USD is trading at 0.6532, up 0.50% on the day. The Australian dollar rose as much as 0.95% earlier before retreating.
RBA shocker
The Reserve Bank of Australia blindslided the markets on Tuesday as the central bank held the cash rate at 3.85%. The markets had priced in a quarter-point cut at 96%, but the RBA had the last laugh. For the first time, the RBA published the vote tally, which was 6-3 in favor of maintaining the rate.
The rate statement was cautious, as members said “there are uncertainties about the outlook for domestic economic activity and inflation”.
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RBA: More time, please
Governor Bullock tried to calm the markets, saying that the decision was about “timing rather than direction” and that the Bank would “wait a few weeks” to confirm that inflation was on track to ease and remain sustainably around 2.5%. Bullock said that “we don’t want to end up having to fight inflation again”.
Inflation is moving in the right direction but the RBA wants to see the second-quarter inflation report on July 30, ahead of the rate decision on Aug. 12. Headline CPI in May eased to 2.1% y/y from 2.4% in April. The core rate dropped to 2.8% from 2.4% in April, the lowest rate since early 2022.
The RBA will be hoping that waiting till August will provide some clarity with regard to US tariff policy. President Trump has pledged new tariffs against various countries but this move is not expected to have much impact on Australia’s economy.
AUD/USD Technical
- AUD/USD is testing resistance at 0.6513. Above, there is resistance at 0.6541
- There is support at 0.6463 and 0.6435
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AUDUSD 1-Day Chart, July 8, 2025
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