On Friday, the Reserve Bank of Australia (RBA) fails to defend the yield target for the second straight day, allowing the yields on the government’s April 2024 bond to advance as high as 0.76% vs. the central bank’s target of 0.1%.

The aussie central bank made no offer to buy the key April 2024 bond at the usual time for such operations, per Reuters.

With the RBA opting out defending the bond target fans speculation that policymakers are set to abandon the program, in the face of rising inflationary pressures.

This comes ahead of the central bank’s November monetary policy meeting due next Tuesday.

Market reaction

AUD/USD is benefiting from the RBA’s inaction in the bond markets, currently trading at 0.7541, almost unchanged on the day.