Australian Dollar Fails to Bounce After RBA Meeting

The Australian dollar went down today after rising at the start of the trading session. The currency attempted to rebound after the central bank’s policy meeting, but the bounce was extremely short-lived.

The Reserve Bank of Australia kept its key interest rate at 1.5% at today’s meeting as was widely expected. The central bank was not particularly concerned about slowing inflation, saying:

Inflation is expected to pick up gradually as the economy strengthens.

The central bank was worried, though, that the strengthening currency may hurt the economy:

An appreciating exchange rate would be expected to result in a slower pick-up in economic activity and inflation than currently forecast.

AUD/USD was up from 0.8001 to 0.8042 intraday but retreated to 0.7984 as of 11:13 GMT today. EUR/AUD traded near the opening level of 1.4792 after falling to 1.4701 during the session.

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