Lee Hardman at MUFG highlights that the Australian Dollar has slipped back below 0.7000 against the US Dollar, testing the 200-day moving average near 0.7030. Despite the RBA’s fourth rate hike this year to 4.60% and its commitment to tackle persistent inflation, Governor Bullock’s cautious remarks on whether policy is restrictive enough have tempered expectations for further tightening and weighed on AUD.

Aussie softens despite RBA move

“The Australian dollar has softened overnight falling back below the 0.7000-level against the US dollar.”

“The pair is currently testing important levels at around the 0.7000-level where the 200-day moving average is also located at close to 0.7030.”

“The RBA reiterated that they will “continue to do what it considers necessary to bring inflation sustainably back to target, including increasing the cash rate target further if needed”.”

“Governor Bullock did add though in the press conference that she hopes that four hikes are restrictive enough to slow inflation, but she doesn’t know.”