RBA Statement Sends Australian Dollar Tumbling

Hello traders, and welcome to Tuesday. Today’s market is reacting to overnight developments, with the Reserve Bank of Australia (RBA) keeping rates unchanged at 4.35%. However, the accompanying statement was perceived as dovish, causing a sharp drop in the Australian dollar. This stands in stark contrast to the strength we saw on Monday, making yesterday’s moves appear as a bull trap for AUD buyers. Similarly, the New Zealand dollar is also losing ground, as its performance often mirrors that of its Australian counterpart.

On the green side of the currency market, we’re seeing strength in Swiss franc, euro, and British pound, as European currencies outperform during the early trading hours.

Commodities: Oil Takes a Breather

Yesterday brought a strong session for oil, especially during the European trading hours, as prices bounced off a key support level. However, the bullish momentum faded toward the end of the day, and today we see oil giving back some of those gains. The focus will now be on whether buyers re-enter the market to continue the recovery initiated yesterday.

Indices: Small Correction from Highs

On the indices front, we are witnessing a minor correction from all-time highs, particularly in the U.S. markets. Despite this pullback, the overall sentiment remains positive, with investors still optimistic about the broader market direction.

Quiet Calendar Ahead

After the overnight news from Australia, the economic calendar is surprisingly quiet for a Tuesday. Both the European and American sessions lack major data releases, leaving the markets to trade on technical levels and existing momentum.

Source: https://www.axiory.com/analytics/market-news/rba-statement-sends-australian-dollar-tumbling