AUD/USD drops 0.5% as RBA delivers expected 25bp rate cut to 3.60%

AUD/USD declined 0.5% (approximately 35 pips) to 0.6520 following the Reserve Bank of Australia's decision to cut interest rates by 25 basis points to 3.60%, as widely anticipated by markets. The RBA's move aims to support economic growth amid softening inflation pressures and global economic headwinds. While the rate cut provided a boost to Australian equities, it weighed heavily on the Australian dollar as yield differentials narrowed against major currencies. The central bank maintained a cautious tone, suggesting further easing may be data-dependent. Technical indicators show AUD/USD testing support at 0.6500, with the next major level at 0.6470. Resistance is seen at 0.6550 and 0.6580. Traders are now focusing on upcoming Australian employment data and Chinese economic indicators, which could influence the Aussie's near-term direction given Australia's strong trade ties with China.