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Australian Dollar Declines Despite RBA Rate Hike
The Reserve Bank of Australia (RBA) has increased its cash rate target by 25 basis points to 4.60%, citing persistent inflation concerns. Despite this expected rate hike, the Australian dollar (AUD) has continued to decline against the US dollar (USD), extending a downward trend that began after reaching a high of 0.7237 on September 9.
The decline in the AUD/USD exchange rate has been influenced by a stronger US dollar, driven by rising US yields amid expectations of a more hawkish stance from the Federal Reserve. Following the RBA's decision, the AUD/USD pair fell to its lowest level since late July, reaching 0.6979. This drop occurred after the pair failed to maintain a bounce above key technical levels, including the 200-day moving average.
Currently, the AUD/USD is trading at approximately 0.69902, remaining below the critical 61.8% retracement level of 0.7007. Analysts suggest that sustained trading below this level keeps the bearish bias intact, while buyers need to reclaim this and the 200-day moving average to shift momentum. The outlook remains cautious as sellers continue to dominate the market.
Source: KLEA News