AUDJPY forex currency pair has been under pressure after the Reserve Bank of Australia paused its interest rate hike policy.
AUDJPY – Weekly Chart
The AUD v JPY exchange rate dropped from the 90 levels to trade at 88. Support lies below that level at 86 if the current weakness persists for the Aussie dollar.
Australia’s central bank held interest rates steady at 3.6%, with the first pause in ten consecutive meetings. The RBA stopped its aggressive rate hike strategy after inflation fell to 6.8% in the latest reading.
The Australian treasurer, Jim Chalmers, said, “We do need to be careful about this new measure of inflation, which will be volatile month-to-month, but, on the face of it, this is a very encouraging sign”.
“It’s more evidence that inflation peaked at the end of last year and it’s moderating this year but it will be higher than we’d like for longer than we’d like,” Chalmers added.
The Reserve Bank governor warned markets that the latest interest rate pause should not be seen as the peak.
“The decision to hold rates steady this month does not imply that interest rate increases are over,” he said. “Indeed, the board expects that some further tightening of monetary policy may well be needed to return inflation to target within a reasonable time frame.”
Mr Lowe added that further rate rises were more likely in the short term than a cut, but the decision would be made “month-to-month”.
AUDJPY Forecast
The Australian dollar could move on Monday with Westpac consumer confidence released. A reading of 78.5 is expected, which is still trailing the current low levels as consumers feel the strain of the recent interest rate increases and inflation.
