AUD/USD Sells Off as RBA Holds Rates at 3.75% Unexpectedly

Australias central bank announced on Tuesday (Monday night EST) that it has decided to hold its cash target at 3.75%. RBA Governor Glenn Stevens said that information about the early impact of the central banks previous rate hikes is still limited and so the RBA considered it appropriate to uphold the monetary policy status quo. The move surprised the consensus forecast, which had unanimously expected a 25bps hike to 4.0%. In the aftermath of the unexpected decision, the Australian dollar plummeted against the greenback: AUD/USD shed 117 pips to reach $0.8806USD, a new session low. Five-day support for the pair rests not far from AUD/USDs current level at $0.8789, hit on Feb. 1.