Dec 10, 2024 (MENAFN via COMTEX) --
(MENAFN) The exchange rate between the Pound and the Australian dollar (GBP/AUD) surged to 1.9944 (+0.75 percent) following the Reserve Bank of Australia's (RBA) statement after its final interest rate decision of the year, where it mentioned it was "gaining some confidence that inflation is moving sustainably towards target."
While the RBA left its interest rate unchanged at 4.35 percent, the FX market focused more on whether the central bank would adjust its guidance. The change in tone indicates that the RBA has moved away from a neutral stance and adopted a bias towards easing.
Australian two-year government bond yields dropped by 9 basis units as the market anticipated an earlier start for rate cuts, with the chances of a reduction in February increasing.
This decline in bond yields also put downward pressure on the Australian Dollar's exchange rates.
"AUD/USD briefly dipped to 0.6380 after the RBA maintained the cash rate at 4.35 percent and signaled a dovish shift in its post-meeting statement. AUD/USD could ease further, potentially hitting a new year-to-date low below 0.6350," said Joseph Capurso, FX strategist at the Commonwealth Bank of Australia.
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COMTEX_460709728/2604/2024-12-10T21:13:31
