Brown Brothers Harriman’s Elias Haddad reports that AUD/USD has retraced part of its US-Iran peace agreement rally after the Reserve Bank of Australia left rates unchanged at 4.35%. The RBA reaffirmed its data-dependent pause but did not rule out further tightening, while BBH would fade market pricing for another hike and sees scope for AUD/USD to undershoot 0.7000 near term.

RBA on hold with data-dependent stance

"AUD/USD retraced some of yesterday’s US-Iran peace agreement rally."

"As was widely expected, the RBA left the policy rate unchanged at 4.35% after delivering three consecutive 25bps hikes since February."

"The RBA reaffirmed its data-dependent pause."

"However, the RBA did not rule out “increasing the cash rate target further if required.”"

"Bottom line: Australia-US 2-year bond yield spreads suggests AUD/USD can undershoot 0.7000 in the near-term."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)