Wed, July 24, 2024

Aussie Recovers, Reserve Bank of Australia Close to Rate Cut

AUD/USD

The Australian money managed to recover yesterday after the November meeting minutes of the Reserve Bank of Australia was released. The greenback failed to hold on to its gains against the Aussie in the latter half of the session.

Initially, the AUD went tumbling down against the US dollar and other major currencies in Tuesday’s trading.

The AUD USD trading pair first went down by 0.10% or 0.0007 points, but it soon made an impressive comeback. Moreover, it rallied by 0.22% or 0.0015 points in the second half of Tuesday’s trading sessions.

The AUD USD pair reached levels from as low as $0.6785 to as high as $0.6825 yesterday.

Meanwhile, Australian dollar contracts also regained footing after contracting in the first half of the day. The AUD futures rose 0.16% or 0.011 in Yesterday’s trading sessions.

The AUD’s weakness came from the Reserve Bank of Australia, which almost eased its rate this November.

Traders were caught off guard at first, resulting in bearish traders taking advantage of the situation. Luckily, the Australian money quickly regained its traction back.

Close Call

Wibest – Reserve Bank of Australia: The RBA’s main building.

According to the recent release of the bank’s meeting, the RBA came tight to reducing its rates by 0.25%. That would bring down the country’s official interest rates to 0.5%.

Although a rate slash would ideally boost the economy, it could also have detrimental effects on the people. The Reserve Bank of Australia considered its possible impact on consumer confidence and savers.

The central bank’s policymakers found it appropriate to keep the interest rates at current levels. This is, of course, given the current situation of the country.

Recent experience after the Reserve Bank of New Zealand slashed its rates were brought up by experts. Some believed that the Reserve Bank of Australia might have looked into similar situations.

The Australian central bank is now still waiting and analyzing for possible moves in the future.

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