AUD/USD down 48 pips to 0.7391 today
MUFG Research discusses AUD/USD outlook in light of this week's RBA decision.
"The RBA's decision to continue with plans to slow QE purchases this month reflects their optimism that the setback for the Australian economy from the current wave of COVID disruption is expected to be "only temporary", and "delay, not derail" the recovery. The RBA expects the economy to bounce back as the vaccination rate increases further and restrictions are eased but emphasized caution over the uncertain timing and pace of the bounce back," MUFG notes.
"So even though the RBA has started to slow weekly QE purchases, its overall plans to normalize policy going forward remain amongst the more dovish spectrum put forward by G10 central banks. It suggests that it will be more challenging for the Australian dollar to extend its recent rebound above the 0.7500-level and back towards the 200-day moving average at around 0.7600 in the near-term," MUFG adds.
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