| Time | Country | Event | Period | Previous value | Forecast | Actual |
|---|
| 07:45 | France | Industrial Production, m/m | September | 1.1% | -0.7% | -0.9% |
| 09:30 | United Kingdom | Purchasing Manager Index Services | October | 52.4 | 51.8 | 52.0 |
AUD strengthened against other major currencies in the European session on Tuesday as investors reacted to the outcomes of the latest policy meeting of the Reserve Bank of Australia (RBA).
The Australian central bank decided to leave its cash rate steady at 4.35% at today’s meeting. The decision was in line with markets’ anticipations. The RBA noted that the country’s inflation had declined significantly since the peak in 2022, but stressed that underlying inflation was still too high. The central bank’s updated forecasts also revealed that its policymakers do not see inflation returning sustainably to the midpoint of its 2%-3% target until 2026.
On the other hand, the RBA acknowledged that output growth in Australia had been weak, partly due to soft household consumption. The central bank cut its GDP projection to 1.5% by the year-end, down from 1.7%.
“Taking account of recent data and the updated forecasts, the Board’s assessment is that policy is currently restrictive and working broadly as anticipated,” the RBA stated. However, it noted there are uncertainties and added that its Board will continue to rely upon the data and the evolving assessment of risks to guide its decisions. In addition, the RBA reiterated that it does not rule anything in or out.
Commenting on the RBA’s latest decision, its governor Michele Bullock indicated that the Board is not ready to lower rates yet as its policymakers want to see evidence that inflation is going to be back sustainably in the band.