The Reserve Bank of Australia is expected to announce its latest interest rate decision on 5 May.
The central bank has been facing a “constant battle” to depreciate the AUD in order to remain competitive in global exports.
“Interest rate cuts and verbal intervention have been used pro-actively by central bank Governor Glenn Stevens to keep the Aussie from rising higher as the interest rate in Australia is still an attractive 2.25%,” senior currency analyst Alfonso Esparza of Marketpulse
“The AUD/USD has been boosted by the rise in prices of iron ore and a struggling USD. The rate differential has given the Australian currency more demand along with the rise of commodities… This will be an interesting week for Aussie traders as data dependency is on the rise.”
He also noted that the RBA chose not to move the rates in the last meeting, prompting economists to predict a more probable rate cut this month. The market is divided in its expectations from what once was an almost unanimous forecast of a rate cut in May, Esparza said.
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