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With Inflation Under Control, RBA Likely to Leave Rates Unchanged

News from down under is that the Reserve Bank of Australia is satisfied with the results of its recent rate hikes which ended in March and are likely to leave interest rates alone at its next meeting on May 6.

Although inflation remains high in some areas, the RBA has not had any reason to fear a spike in inflation. Recent reports show consumer and business confidence down while retail and home building have slowed. Last week the AUDUSD surged to a new 24-year high on rumors of another rate hike, which was quickly met by new selling.

Do not expect a selloff in the AUDUSD just because the RBA does not raise rates. A strong U.S. stock market coupled with better than expected commodity prices are enough to keep the Aussie firm at current levels. Look to buy breaks as long as the support holds and the U.S. stock market remains firm.

Please do not hesitate to contact us at 80-971-2440, with any questions.

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