The Australian Dollar is retreating against the USD again. The current quote for the instrument is 0.6469.
The Reserve Bank of Australia had a meeting today and decided to raise the benchmark interest rate by 25 basis points, from 2.35% to 2.60%. Market players were quite surprised: the RBA introduced a 50-point rate after each of its latest meetings. Average market expectations implied the same hike, that´s why such a soft move of the regulator received a negative vibe.
In the comments, the RBA said that the future moves and rate hikes would be defined based on inflation and the labour market in the country. An increase in the rate will help reach some kind of a balance between supply and demand. The regulator believes there were enough rate hikes in such a short period of time. In the future, the rate will continue rising.
Inflation expectations remain the same – 2-3%. Mid-term inflation forecasts are looking quite stable.
In the future, the RBA will continue paying much attention to the labour market dynamics and formation of prices.
Overall, everything sounded pretty confident, apart from the rate decision. Probably, the first negative vibe in the AUD will be priced in quickly and the asset may reach stability.
Source: Roboforex
