Support
RBA raises rates after cycle pause
Aussie rallies 1% after rate hike to 3.85%
The RBA unexpectedly raised interest rates by 25 basis points to 3.85%, despite taking a more dovish approach last month.
Goldman Sachs and Deutsche Bank are forecasting more rate hikes in the coming quarter.
The RBA unexpectedly raised interest rates by 25 basis points to 3.85%, despite taking a more dovish approach last month.
THE RBA
The RBA unexpectedly hiked interest rates by 25 basis points for the cash target rate to accumulate to 3.85%. This comes in after the bank had paused hiking rates last month, setting the future path solely on economic indicators till the 2 to 3% target is reached.
Earlier last month the bank took a more dovish approach as price pressures in Australia eased, which is why the stance came as a surprise after the hawkish policy hold off.
Big banks such as Goldman Sachs and Deutsche bank are still in tune with their forecast with more rate hikes in the coming quarter.
THE AUD/USD
The AUD/USD pair surged 1% after the news now trading near 0.669 after hitting lows of 0.657 last week. Strong resistance for the pair is pinned near 0.6680. Today the RSI indicator on the daily frame pointed to the upside direction although the Australian dollar remains among the weakest dollar rivals as continues hikes from the Fed increase momentum to the safe haven currency.
As the battle for curbing inflation continues, Investors now tune into the FOMC meeting later this week which will also be a gamechanger for markets after Q1. Especially in the midst of another bank failure of First Republic Bank.
