The AUD/USD pair has once again started to decline following the recent decision of the Reserve Bank of Australia (RBA).
On Tuesday, the Australian dollar experienced a renewed drop against the US dollar, with the current AUD/USD quote standing at 0.6653.
During its latest meeting, the RBA decided to maintain the interest rate at 4.1% per annum, marking the second pause in the monetary policy adjustments this year. The board of directors expressed the need for additional time to evaluate the economic consequences of the tightening cycles implemented over the past year.
In its comments, the RBA mentioned that further rate hikes might be necessary to bring inflation back within the target range within a reasonable timeframe. Such statements are customary, as they provide flexibility for the central bank to maneuver. The RBA is known for its adaptable approach to monetary policy.
This creates a sporadic pattern in the monetary policy: rate hikes in February and March, a pause in April, further hikes in May and June, and another pause in July. This differs from the more consistent and rigid rate cycles adopted by the Federal Reserve and the European Central Bank, both of which follow more predictable rate patterns.
The RBA's inflation target remains at 2-3%. Currently, the consumer price index surpasses 6%, leaving ample room for policy intervention.
