FX.co ★ AUS 10Y Yield Rises After RBA Decision

Australia's 10-year government bond yield has increased to approximately 4.35%, nearing its highest level in three weeks. This movement comes on the heels of the Reserve Bank of Australia's (RBA) recent policy decision. As anticipated, the RBA maintained its cash rate at 3.60% and reiterated its commitment to a data-driven policy approach. Despite the decision, persistent inflationary pressures remain, highlighted by August's 3% inflation rate, the highest recorded since July 2024. Additionally, the country's Q2 GDP growth reached 1.8%, the fastest since September 2023, providing the RBA with the latitude to focus on managing inflationary concerns. The central bank also observed signs of a revival in private demand and cautioned that inflation might be persistent, even after implementing a 75-basis-point rate cut earlier this year. This aligns with Governor Michelle Bullock's recent prudent outlook, emphasizing that while the global environment continues to be unpredictable, Australia's monetary policy framework is adequately prepared to address potential international economic impacts.