AUD/USD experienced a noticeable retreat last week and has now paused its decline.
The Australian dollar is currently in a consolidation phase after a significant drop against the US dollar. The current AUD/USD exchange rate stands at 0.6685.
After the Reserve Bank of Australia (RBA) took decisive steps, investors are taking a pause to reassess their portfolios and regain their composure. All the crucial economic indicators have already been released, and it is now time to objectively analyze and account for them in the currency quotes.
According to Swiss Bank UBS, the Australian economy is currently at a critical juncture, with the likelihood of a recession constantly increasing. This is primarily due to the continuous decline in consumer spending. If the Reserve Bank of Australia continues to raise interest rates, the economic outlook may become even more severe, raising the probability of a recession to 50%.
The statistics confirm this perspective. Following the recent interest rate hike by the RBA, the savings of the population have reached their lowest levels since the global economic crisis. High inflation erodes disposable income, compelling consumers to spend more and further deplete their savings.
It is crucial for investors and market participants to closely monitor the actions and statements of the Reserve Bank of Australia, as they will play a vital role in determining the future trajectory of the Australian dollar.