AUD/NZD holds below 1.1000 following RBA rate decision

The AUD/NZD cross attracts some sellers near 1.0990 on Tuesday during the early European session. The cross edges lower after the Reserve Bank of Australia (RBA) decided to hold the interest rate unchanged at 4.35% at its May meeting, but offered a less hawkish tone than the March statement. Investors await the RBA Press Conference for fresh catalysts. 

As widely expected, the Australian central bank left the Official Cash Rate (OCR) unchanged at 4.35% for the fourth meeting in a row on Tuesday. The statement noted that inflation in Australia is easing, but remains high. Therefore, the board expects that it will be some time yet before inflation will move sustainably within the target range. The RBA further stated that the economic outlook remains uncertain and that the central bank will not rule anything in or out on future decisions. The Australian Dollar (AUD) faces some selling pressure following the monetary policy meeting as the RBA did not deliver as much hawkish bias as the market expected. 

On the Kiwi front, the Reserve Bank of New Zealand (RBNZ) kept its cash rate unchanged at 5.5% for the sixth consecutive meeting last month and emphasized that restrictive monetary policy was necessary to further reduce capacity pressure and bring down inflation. The RBNZ also signaled its intention to delay any shift toward monetary easing until 2025 due to elevated inflation pressures in the first quarter. This, in turn, might provide some support to the New Zealand Dollar (NZD) and might cap the upside of the AUD/NZD cross.