The Reserve Bank of Australia maintains Interest rates unchanged; they have stated that there are no plans to increase the interest rates until 2024. The RBA acknowledged that there had been a strong recovery in its quarterly update earlier in May, which might force the RBA to change the rate earlier than anticipated.
Higher inflation rates mean lower actual interest rates; usually, this means a weaker currency, but spikes in U.S. inflation make traders build a case for a weaker U.S. dollar. Even with the RBS maintaining interest low, we do not see a stronger U.S. dollar in the short term.
The Australian dollar is considered a pro-risk currency, and it is very tied to commodity price inflation. Australia is primarily a commodity exporter, but they are a net importer of crude oil. Some investors might believe that rising crude prices could support AUD. Still, the only way higher oil prices could benefit AUD would be as a sign of an economic recovery. Higher crude oil prices affect Australia's trade balance and thus its currency.
If commodity prices were to roll over again, this would affect AUD/USD; its trade balance would compress, affecting risk sentiment and expectations for future inflation rate differences. Lower commodity prices are interpreted as favorable for USD against the AUD
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