Today's Reserve Bank of Australia's (RBA) decision was perceived by the market as hawkish and the AUD was able to gain. Nonetheless, economists at Commerzbank expect the Aussie to struggle to extend the rally in the near term.

Hawkish RBA

“As expected, the RBA raised its key interest rate by 25 bps to 3.35% and held out the prospect of further rate hikes.”

“What matters most now is the upcoming data releases. The RBA has again signaled its willingness to do more. However, it remains to be seen to what extent the economic and inflation developments will make this necessary.” 

“In the short term, it could be difficult for the AUD to gain further against the USD since the Fed is also likely to stick to its hawkish stance and raise interest rates further.”