Australian Dollar trades lower in countdown to RBA’s monetary policy

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The Australian Dollar (AUD) trades lower against its major currency peers during the European trading session on Friday. The Australian currency is slightly under pressure as investors turn cautious ahead of the Reserve Bank of Australia’s (RBA) monetary policy announcement on Tuesday.

Australian Dollar drops against its major currency peers while focus shifts to the RBA’s monetary policy.
The RBA is expected to hike its OCR by 25 bps to 4.35% on Tuesday.
The Fed is expected to keep interest rates steady at their current levels during the year.

Australian Dollar Price Today

The table below shows the percentage change of Australian Dollar (AUD) against listed major currencies today. Australian Dollar was the weakest against the Japanese Yen.

	USD	EUR	GBP	JPY	CAD	AUD	NZD	CHF
USD		-0.01%	0.02%	-0.05%	-0.01%	0.13%	0.28%	0.06%
EUR	0.01%		0.03%	-0.06%	-0.01%	0.15%	0.28%	0.07%
GBP	-0.02%	-0.03%		-0.11%	-0.03%	0.11%	0.25%	0.07%
JPY	0.05%	0.06%	0.11%		0.06%	0.19%	0.31%	0.13%
CAD	0.00%	0.01%	0.03%	-0.06%		0.13%	0.27%	0.09%
AUD	-0.13%	-0.15%	-0.11%	-0.19%	-0.13%		0.14%	-0.03%
NZD	-0.28%	-0.28%	-0.25%	-0.31%	-0.27%	-0.14%		-0.18%
CHF	-0.06%	-0.07%	-0.07%	-0.13%	-0.09%	0.03%	0.18%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Australian Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent AUD (base)/USD (quote).

According to the April 27-30 Reuters’ poll, 30 of 33 economists have predicted that the RBA will raise its Official Cash Rate (OCR) by 25 basis points (bps) to 4.35%.

Hawkish RBA expectations are backed by accelerating Australian inflationary pressures. The data showed on Wednesday that the annualized Consumer Price Index (CPI) growth in March was 4.6%, marginally slower than estimates of 4.7%, but faster than 3.7% in February.

Investors will pay close attention to RBA Governor Michele Bullock’s press conference to get fresh cues regarding the monetary policy outlook and how far inflation could accelerate amid elevated energy prices due to the prolonged closure of the Strait of Hormuz.

During the European trade, the antipodean trade marginally lower against the US Dollar (USD) at around 0.7195, but the Aussie pair is close to its 10-day high of 0.7205 posted earlier in the day.

The US Dollar (USD) is broadly under pressure even as traders seem confident that the Federal Reserve (Fed) will hold interest rates steady at their current levels by the year-end.

In Friday’s session, investors will focus on the US ISM Manufacturing PMI data for April, which will be published at 14:00 GMT. The ISM Manufacturing PMI is expected to come in higher at 53.0 from 52.7 in February.

Economic Indicator

RBA Interest Rate Decision

The Reserve Bank of Australia (RBA) announces its interest rate decision at the end of its eight scheduled meetings per year. If the RBA is hawkish about the inflationary outlook of the economy and raises interest rates it is usually bullish for the Australian Dollar (AUD). Likewise, if the RBA has a dovish view on the Australian economy and keeps interest rates unchanged, or cuts them, it is seen as bearish for AUD.