AUD Retreats From Two-Month High After RBA Meeting

The Australian dollar retreated from its two-month high after the Reserve Bank of Australia's (RBA) policy meeting. The RBA kept interest rates unchanged at 4.35%, their highest level since December 2024, for the second consecutive meeting.

This decision was in line with market expectations and followed three rate hikes this year aimed at slowing down the economy and controlling elevated inflation. Despite maintaining current interest rates, the RBA signaled that another rate hike remains an option if fresh inflationary risks emerge.

The Australian dollar declined around 0.3% against its US counterpart to 0.7039 after reaching a session high of 0.7063. The RBA also noted that underlying inflation eased to 3.6%, a better outcome than previously forecast, although it remains above the target range.