On February 6, local time, the Bank of Australia (RBA) decided to keep the cash rate at 4 at the monetary policy decision-making meeting..35% unchanged。

RBA's first press conference on monetary policy decisions focuses on inflation risks, employment and growth forecasts。Ahead of the press conference, RBA board members surprised the market with a statement that was more hawkish than expected.。

Keep cash rate unchanged

Speaking at a press conference, RBA Governor Michele Bullock said: "It is more important than market pricing to see inflation continue to fall, which is currently over 4%, which is too high.。"

Governor Bullock believes that looking ahead, productivity will return to the Australian economy。She has reservations about the impact of tax breaks on consumption, the economic outlook and inflation.。

RBA does not want inflation expectations to rise。Based on this, the RBA raised interest rates in November to mitigate inflation risks to the economy.。RBA has not ruled out any possibility for interest rate decisions.。

Bullock governor understands mortgage holders' concerns about risk of rising interest rates。However, she believes that tackling inflation will bring more benefits。RBA needs to ensure inflation continues to move towards target level。On a scale of 1 to 10, Governor Bullock rated the optimism of achieving the inflation target at 5.。

The board believes they can bring inflation back to target without negatively impacting the labor market。RBA sees inflation risk as balance, forecasts show inflation will return to target in 2025。RBA board continues to focus on job growth。Board members must be confident inflation will return to target range before rate cut。

RBA's hawkish stance

On Tuesday, the RBA held the cash rate at 4 despite weaker fourth-quarter inflation data..35% unchanged。However, the statement maintained a hawkish tone.。

RBA board notes inflation remains too high, reaches 4.1%, attributing sticky inflation to higher service prices。Other key points in the statement include:

• Wage growth may not increase significantly further and remain in line with the inflation target。
• Economic Outlook Remains Amid Uncertainty That Inflation Risks Remain。
• According to the central forecast, inflation is expected to return to the target range (2-3%) in 2025.。
• Board expects moderate improvement in employment。
• Household consumption remains uncertain。
• The board expects it will take some time for inflation to continue to return to the target range.。

It is worth noting that despite the weaker inflation data in the fourth quarter, the RBA did not rule out the possibility of further interest rate hikes, and policy decisions will depend on income data.。

AUD / USD Response

Before the announcement and press conference, the AUD / USD exchange rate fell to 0 at one point..$64,781, then rose to 0.High of $65,084。

However, under the influence of the statement and press conference, the AUD / USD exchange rate fell to 0 at one point..A low of $64870, which later rose to 0.High of $65174。

On February 6, the AUD / USD exchange rate increased by 0.47% to 0.65131 USD。