FX Update: The Australian dollar rallied strongly
FX Update: The Australian dollar rallied strongly after the RBA refrained from cutting interest rates, instead leaving the cash rate at 1.50% following its policy review today. There had been speculation for the central bank to cut by 25 bp following unexpectedly soft Q1 CPI data, though the proximity of the May-18 federal election looks to have stayed the central bank's hand. AUD-USD rallied over 0.7% in pegging a high at 0.7048, which is the loftiest level seen since last Wednesday while putting in some distance from the four-month low seen yesterday at 0.6962. AUD-JPY and other Aussie crosses rallied by similar magnitudes. RBA Governor Lowe's statement was notably downbeat on the economic outlook, however, compared to the relatively balanced prognosis made in recent statements, laying the groundwork for future rate cuts. Elsewhere, the dollar has bean trading with a generally softer bias in the wake of President Trump's ratcheting up of trade tensions with China. EUR-USD has printed a two-session high at 1.1218, and Cable has breached above its Monday high on route to a peak at 1.3131. USD-CAD printed a three-day low at 1.3410. USD-JPY has also posted modest gains, to the upper 110.02, though remains down by 0.6% form week-ago levels in the wake of yesterday's yen-driven declines. The calendars in Europe and North America is quiet today, leaving focus on geopolitical U.S.-China trade developments.