The Australian Dollar fell against the Japanese Yen after the RBA decided to leave the cash rate unchanged at 2.50% in line with market expectations. In the accompanying statement, Governor Stevens suggested accommodative monetary policy remained necessary to support demand and repeated the bank’s view that “the most prudent course of action is likely to be a period of stability in interest rates.”
The AUD/USD had been trading near its 2014 highsahead of the rate decision, with the rise in the currency over the past few months being noted by the RBA as detracting from its efforts to achieve balanced growth in the domestic economy. Also notable was a divergence from the previous statement, acknowledging that China’s growth may have slowed in the first part of this year.
An upside surprise to the US ISM Manufacturing data due in the session ahead may help bolster demand for the greenback and in turn put pressure on the AUD/USD. Daily FX Currency Strategist Ilya Spivak has pointed to a possible top in the currency pair around the 0.9300 handle.
AUDJPY (5min Chart) – April 1, 2014 | Created with FXCM Marketscope