The good news for the aussie is that the decision today isn't as surprising to markets, as traders were already pricing in roughly 66% odds that the RBA will leave the cash rate unchanged. As such, we're only seeing a modest drop in AUD/USD from around 0.6695 before the decision to around 0.6660 currently.
This was RBA governor Philip Lowe's second last meeting and it sure looks like they will be keeping policy unchanged all the way through until the end of his tenure in September. That is barring any major surprising inflation developments in the weeks ahead.
The RBA is angling towards being more data dependent and they made it clearer this time around with a subtle shift in the forward guidance. In other words, they are saying that "unless the data tells us that inflation is going to be sticky or keep at a high level, we may opt to stay on the sidelines until otherwise needed".
As such, I reckon this will keep the pressure on the aussie currency if we are to go by standalone metrics. The rates differential between the US and Australia is now at its widest on record and that tells you how unfavourable it is for the aussie against the dollar.
The only thing that the aussie has going for it is the more positive risk sentiment across markets. China's flagging economy and currency struggles are not a source that they can depend on for reliability, so it may be tough to think about any major upside for the aussie.
The RBA decision today will not hurt too much but on the balance of things, this resumes the technical drop from last week and AUD/USD looks on course to be pressured towards 0.6600 again next.
