FX.co ★ Aussie Dollar Rises as RBA Stands Pat

The Australian dollar strengthened to approximately $0.660 on Tuesday, marking its third consecutive session of gains as market participants evaluated the Reserve Bank of Australia's recent monetary policy decision. The central bank maintained the cash rate at 3.6%, consistent with market anticipations and ensuring it remains at its lowest point since April 2023. The board observed that both the headline and trimmed mean inflation remained within the 2–3% target range for the second quarter. However, initial indications suggest that third-quarter inflation may surpass expectations. Additionally, ongoing uncertainties regarding domestic growth and inflation led the central bank to adopt a cautious approach. Domestically, private sector credit growth in August matched market projections but showed a slight deceleration compared to the previous month, while total dwelling approvals declined more slowly than expected yet defied projections. Internationally, the Australian dollar received further support from a weakening US dollar amidst increasing concerns about a potential US government shutdown.