The Reserve Bank of Australia’s removal of a projected rate hike tempers AUD upside, capping gains against the USD near-term.
The Australian Dollar faces renewed pressure after the Reserve Bank of Australia (RBA) adjusted its policy outlook, removing one projected rate hike and holding the cash rate at 4.35%. The RBA now expects the policy rate to remain around 4.40% through 2028, down from a prior peak of 4.7% by mid-2028, reflecting softer inflation forecasts in its updated Statement on Monetary Policy (SMP).
Implied AUD/USD volatility has dropped to a one-month low, with technical support near 0.6980 and resistance levels at 0.7120 and 0.7200/0.7275. The RBA’s extended policy freeze until mid-2028 reduces near-term optimism for the currency, shifting focus toward the USD and JPY amid broader yield trends.
The 10-year Australian Commonwealth Government Bond (ACGB) yield remains elevated near 5.0%, tracking global developed market yield movements, with resistance at 5.10%.