Aussie Bid Following RBA Rate HikeThe Australian Dollar has been in the spotlight today following the May RBA meeting overnight. The RBA took the historic move of hiking rates by 0.25% lows off their prior 0.10% level, taking the headline cash rate there up to 0.35%. The move marks the first such rate increase in over a decade and adds the RBA to the list of G10 central banks embarking on a policy normalisation path.In the statement issued alongside the decision, the RBA explained the move, saying: “The economy has proven to be resilient and inflation has picked up more quickly, and to a higher level, than was expected. There is also evidence that wages growth is picking up. Given this, and the very low level of interest rates, it is appropriate to start the process of normalising monetary conditions.”During the post-decision press conference, RBA governor Lowe went on to say: “This rise in inflation largely reflects global factors, but domestic capacity constraints are increasingly playing a role and inflation pressures have broadened, with firms more prepared to pass through cost increases to consumer prices.”Looking ahead, Lowe advised the further hikes are likely coming. With regard to timing, Lowe said “How quickly we get there and if we do get there will be determined by how events unfold,” he said. “The board is committed to doing what is necessary to ensure that inflation in Australia returns to target over time.”Technical ViewsAUDUSDThe reversal from the .7656 level in AUDUSD has seen the market breaking below the bullish channel and back under the previously broken bearish trend line. With both MACD and RSI bearish here, the focus is on further downside while the Aussie holds beneath the .7188 level, keeping focus on .6989 and .6833 next.
Source: Tickmill
