- AUD/USD has recovered from 0.6790 on the 50 bps rate hike announcement by the RBA.
- A fourth consecutive half-a-percent rate hike has pushed the OCR to 2.35%.
- The DXY is expected to remain volatile ahead of US ISM Service PMI data.
The AUD/USD pair has recovered sharply after slipping below the critical support of 0.6800. The Reserve Bank of Australia (RBA) has announced a rate hike by 50 basis points (bps) consecutively for the fourth time to combat soaring price pressures. Officially, the RBA’s Official Cash Rate (OCR) has increased to 2.35%.
As price pressures are accelerating dramatically in the Australian economy and households are facing the headwinds of higher payouts, a rate hike decision by the RBA was highly expected. The Australian inflation rate has been recorded at 6.1% for the second quarter of CY2022. This has squeezed the margins of corporate significantly. The corporate has failed to pass on the impact of inflated-input prices to the end consumers.
This week, more fireworks are expected from the Australian economic calendar as the Australian Bureau of Statistics will report the Gross Domestic Product (GDP) numbers. The Australian economy is expected to grow by 1% on a quarterly basis vs. 0.8% recorded in the prior quarter. Solid GDP data will strengthen the aussie bulls further.
Meanwhile, the US dollar index (DXY) has extended its gains after overstepping the immediate hurdle of 109.50. Earlier, the DXY printed a low of 109.40 amid lower consensus for the US ISM Services PMI data. The economic data is seen lower at 55.5 than the prior release of 56.7.
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. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD struggles to recover above 1.0900 as markets remain cautious
![EUR/USD struggles to recover above 1.0900 as markets remain cautious](https://editorial.fxstreet.com/images/Markets/Currencies/Majors/EURUSD/dollar-and-euro-bills-58059534_XtraSmall.jpg)
EUR/USD stays on the back foot and trades below 1.0900 following Thursday's sharp decline. Dovish comments from European Central Bank officials and the risk-averse market atmosphere make it difficult for the pair to stage a rebound on Friday.
GBP/USD falls toward 1.2900, looks to post weekly losses
![GBP/USD falls toward 1.2900, looks to post weekly losses](https://editorial.fxstreet.com/images/Markets/Currencies/Majors/GBPUSD/new-style-twenty-pound-notes-3079195_XtraSmall.jpg)
GBP/USD continues to push lower toward 1.2900 in the American session on Friday. Disappointing Retail Sales data from the UK, combined with the US Dollar (USD) recovery amid souring mood, causes the pair to stay under bearish pressure ahead of the weekend.
Gold extends daily slide, trades near $2,400
![Gold extends daily slide, trades near $2,400](https://editorial.fxstreet.com/images/Markets/Commodities/Metals/Gold/gold-coins-on-a-weight-scale-gm173237086-20246712_XtraSmall.jpg)
Gold's correction from the record-high set earlier in the week deepens on Friday. With the US Dollar (USD) benefiting from safe-haven flows and the 10-year US yield holding steady above 4.2%, XAU/USD tests $2,400 and looks to post small weekly losses
Top 10 crypto market movers as Bitcoin and Ethereum hold steady ahead of $1.8 billion options expiry
![Top 10 crypto market movers as Bitcoin and Ethereum hold steady ahead of $1.8 billion options expiry](https://editorial.fxstreet.com/images/Markets/Currencies/Digital%20Currencies/Bitcoin/bitcoins-52602600_XtraSmall.jpg)
Bitcoin and Ethereum hold steady above $64,000 and $3,400 as $1.8 billion in options expire on Friday. WazirX hack of $230 million potentially linked to Lazarus Group ushers correction in Shiba Inu, among other assets.
Week ahead – Flash PMIs, US GDP and BoC decision on tap
![Week ahead – Flash PMIs, US GDP and BoC decision on tap](https://editorial.fxstreet.com/images/Resources/calendar-12194649_XtraSmall.jpg)
US data awaited amid overly dovish Fed rate cut bets. July PMIs to reveal how economies entered H2. BoC decides on monetary policy, may cut rates again.