The Australian dollar is losing weight against the US dollar. The current AUDUSD quote is 0.6803.
The Reserve Bank of Australia published the minutes of its latest meeting, and their content left investors perplexed. The RBA did consider the possibility of suspending the monetary tightening cycle at its June meeting, but ultimately decided otherwise. The main reason for this decision was the tight labour market and the controversial situation around national inflation.
The Central Bank weighed all the risks from an unexpected increase in the CPI, as well as a new surge in housing prices. Collectively, this formed the basis for further increases in the cost of credit. Currently, the interest rate is at its highest level since April 2012, standing at 4.1% per annum.
Investors did not interpret the minutes as totally hawkish. They could see the RBA's confusion and readiness to act quickly, with all the accumulated risks taken into account.
Nevertheless, subdued inflation forecasts have put pressure on the AUD. Overall inflation is currently around 7% and is not expected to reach the 2-3% target until mid-2025.