AUD/USD advances to approximately 0.7070 during the early Asian session on Wednesday. The RBA maintained the OCR at 4.35% during the June monetary policy meeting on Tuesday. The Federal Reserve is expected to maintain the current interest rates during its meeting on Wednesday. The AUD/USD pair is experiencing modest gains, hovering around 0.7070 in the early hours of trading in Asia on Wednesday. The Australian Dollar strengthens against the US Dollar after the Reserve Bank of Australia delivered a hawkish hold on rates on Tuesday.
As widely anticipated, the RBA opted to maintain the Official Cash Rate at 4.35% following the conclusion of its June monetary policy meeting. This represents a pause after three successive 25 basis points rate increases earlier this year. Despite maintaining the interest rate at its current level, the board members indicated that additional rate increases could be required to meet their objectives. Members noted that the Australian central bank is “focused on ensuring that inflation does not become embedded once the impulse from higher oil prices has passed through.”
Positive developments surrounding the US-Iran peace agreement could bolster the Australian dollar’s performance as a higher-risk asset. US Vice-President JD Vance stated on Tuesday that US President Donald Trump might opt to unveil a preliminary agreement aimed at concluding the conflict with Iran prior to Friday, following the US president’s assertion that the agreement had already been finalised. Meanwhile, Iran’s Foreign Minister Seyed Abbas Araghchi confirmed that a new round of discussions aimed at achieving a final peace agreement with the US would commence in Switzerland on the same day.
The Federal Reserve’s policy meeting is set to capture attention on Wednesday. The US central bank is expected to maintain its key interest rate within the range of 3.50% to 3.75%, as it adopts a “wait-and-see” approach. Traders will pay close attention to the press conference, seeking insights into how new Fed chair Kevin Warsh will guide the US central bank into its forthcoming phase.