The RBA (Reserve Bank of Australia) released their monetary policy decision today with no change from the base rate of 7.25%. This is still the highest rate in 12 years and one of the highest among the major currencies. In addition to the "no change" decision the RBA made several dovish (indicating a lower likelihood for interest rate hikes) comments. These comments including an interesting allusion to the fact that petrol or gas prices and a tight financial market has been adequate to control growth. Many forex traders are interpreting that as a major signal that the RBA will not be raising rates in the near term and the AUD has been falling in value.
This is important because one of the major drivers of a currency's value are interest rates. However, this is not the only driver for the Australian dollar and trade or commodity prices are another big factor. The big move down on the AUD seems out of pace with commodities - especially gold. I think this is another nice opportunity to catch a short term bounce and perhaps a breakout above resistance.