Aussie Dollar Takes a Hit Ahead of RBA Meeting

Market Trends - 04/04/2016

After touching a 9-month high last week, AUDUSD posted a steady retreat since today’s open. The Melbourne Institute's inflation gauge was flat in March, whereas the yearly statistic fell -0.40% since the prior measurement. The inflation data was followed by a report showing no growth in building approvals, despite February’s 0.30% which led to expectations of 0.40% that were missed by a long shot.

The Reserve Bank of Australia is due to meet on Tuesday where no changes to policy are expected. The bank left interest rates at record lows of 2.00% since May last year, and have been hesitant to upset the balance as economic data has been modestly improving. Ahead of tomorrow's meeting the currency is expected to come under pressure. The AUD rallied nearly 12.00% since January of this year, posting a strong rebound over a weaker US dollar. Officials have said that the Australian dollar is "getting ahead of itself" and that $0.65 is a more preferred exchange rate to the USD.


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