Breaking: RBA raises OCR by 50 bps to 0.85%, AUD/USD spikes towards 0.7250
|
The Reserve Bank of Australia (RBA) board members announced a 50 basis points (bps) hike to its official cash rate (OCR), lifting it from 0.35% to 0.85% at their June 7 monetary policy meeting.
The RBA surprised markets once again to the upside, as they had priced in a 25 bps lift-off.
The central bank fights raging inflation head-on, with a big hike while it says that “the economy is resilient.”
A Reuters poll of 35 economists showed the RBA will lift its cash rate by another 25 bps to 0.60%. 11 predicted a 40 bps increase to 0.75%, where rates were before the pandemic.
AUD/USD reaction
The AUD/USD pair jumped over 50-pips in a knee-jerk reaction to the hawkish RBA decision.
The spot was last seen trading at 0.7233, up 0.60% on the day.
About RBA rate decision
RBA Interest Rate Decision is announced by the Reserve Bank of Australia. If the RBA is hawkish about the inflationary outlook of the economy and rises the interest rates it is positive, or bullish, for the AUD. Likewise, if the RBA has a dovish view on the Australian economy and keeps the ongoing interest rate, or cuts the interest rate it is seen as negative, or bearish.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.