The Australian dollar paired with the US dollar has temporarily ceased its decline. The current AUDUSD exchange rate stands at 0.6438.
Yesterday, the Aussie experienced a loss of approximately 0.8% within a day, marking the most significant intraday decline in a month.
This downturn was prompted by the market's reaction to the Reserve Bank of Australia's meeting outcome. The RBA raised the interest rate to 4.35% per annum, the highest level in 12 years, thereby ending a four-month phase of stable monetary policy. At the same time, the regulator adopted a somewhat milder tone in its commentary, stating that all further decisions would be made in consideration of incoming data.
The next RBA meeting is scheduled for December. The consensus forecast suggests that the rate will remain unchanged.
The final paragraph of the RBA statement featured notable changes in wording. This might indicate that the monetary authorities no longer anticipate the need for a rate hike as a lever. Nevertheless, they stand prepared to take action should circumstances change.
The Aussie's heightened sensitivity to the RBA's decision is due to the relatively abrupt shift in sentiment.