AUD was restrained ahead of the RBA meeting overnight but the unchanged policy decision and accompanying statement are set to leave the currency unperturbed. As reflected in the uptick in the February TD Securities inflation reading yesterday to 2.7% YoY the central bank has limited room for easier policy despite weaker job market conditions. Moreover, the RBA appears to be less concerned about the level of the AUD, and despite noting that the AUD remains high by historical standards there was no comment today about expecting further declines in the currency. Overall the statement was similar to last month.
AUD has held up well even in the face of weaker Chinese data and will face little damage from today’s RBA outcome, with strong support around AUD/USD 0.8821 and resistance around 0.8990.