AUD/USd is consolidating its overnight losses as the market assumes the Bank will pause after hiking in October and November. Traders say the RBA has never before hiked at three straight meetings. Here is the paragraph in which they take their foot off the monetary brake-pedal:
The Board noted that the rise in the exchange rate is likely to constrain output in the tradeables sector and dampen price pressures. Nonetheless, growth is likely to be close to trend over the year ahead and inflation close to target. With the risk of serious economic contraction in Australia now having passed, the Board’s view is that it is prudent to lessen gradually the degree of monetary stimulus that was put in place when the outlook appeared to be much weaker. The adjustments at the October and November meetings will work to increase the sustainability of growth in economic activity and keep inflation consistent with the target over the years ahead.
Bids are seen from Asian central banks in the 0.8920/30 region, traders say. Uptrend support for the pair comes in at 0.8915.
