The Reserve Bank of Australia kept rates steady for a second meeting, citing slower-than-expected inflation impact from Middle East tensions.
The Reserve Bank of Australia left its Official Cash Rate unchanged at 4.1% for the second consecutive meeting, matching market expectations. The decision weighed on the Australian Dollar, pushing AUD/USD below 0.7050 amid a modest USD rebound.
In its statement, the RBA noted that inflation effects from the Middle East conflict have been milder than anticipated but warned inflation may not return to the 2-3% target range until late 2027. The central bank also flagged upside risks to inflation and reiterated its willingness to hike rates further if needed.
Traders remained cautious ahead of the post-meeting press conference and key US inflation data, including Wednesday’s CPI and Thursday’s PPI. The AUD/USD pair held within recent ranges, with Middle East developments also in focus for USD direction.