In terms of policy guidance, the subtle but most important change from the RBA is coming from this passage. In March, they said that:
"The Board expects that further tightening of monetary policy will be needed to ensure that inflation returns to target and that this period of high inflation is only temporary."
In April, they now say that:
"The Board expects that some further tightening of monetary policy may well be needed to ensure that inflation returns to target."
The key words in there being 'some' and 'may well', stressing the point that if inflation developments continue to be more favourable, then perhaps they are comfortable enough to stay on the sidelines from hereon.
The aussie has dropped on the initial reaction, but that is just some light adjustment to market pricing as OIS probability did indicate roughly 85% odds of traders anticipating the RBA to stay on hold.
It isn't a major reaction of sorts, with the 200-day moving average at 0.6749 still very much intact. For sellers, that is the key level to try and break down now as highlighted here.
For now, there shouldn't be much changes to market pricing in terms of what to expect from the RBA moving forward. The OIS market already signaled that traders are viewing the cash rate being at 3.60%, where it is currently, to be the peak. I don't expect that pricing to reach 100% certainty, so that should limit any material downside for the aussie based off this decision alone.
Given that there is still a chance that the RBA may resume rate hikes in May, it makes the next key data point the one to determine the next big change in market pricing again. And for that, we will have to wait until the end of the month where we will only get Australia Q1 CPI data on 26 April.
