The Australian Dollar Fell After Less Hawkish Comments From RBA

The Australian dollar fell on Tuesday after the Reserve Bank of Australia spoke less hawkish-than-expected at the first of a series of central bank meetings this week.

Attention is now focused on the US Federal Reserve, which begins two days of meetings on Tuesday and is expected to announce the start of reducing stimulus by asset purchases. The market is also digesting the rate hike at the BoE meeting on Thursday.

In recent weeks, investors have been expecting a wave of monetary policy tightening from central banks, as they are betting that policymakers are concerned about high enough inflation to end the era of low-interest rates in light of the spread of the Coronavirus pandemic.

The Australian central bank did not show any tightening of monetary policy as expected, which pushed the Australian dollar down 0.7 percent to $ 0.7462, its lowest since October 22.

The Reserve Bank of Australia confirmed that inflation was still low, but deleted its previous prediction that interest rates were unlikely to be raised before 2024.