AUDUSD has risen to almost 0.6950 after the RBA announced a 25 basis point interest rate hike to 3.35%.
AUDUSD pair has risen to about 0.6950 after the RBA raised the Official Cash Rate (OCR) by 25 basis points (bps), as predicted. The RBA’s fourth straight 25 basis point rate rise has lifted the OCR to 3.35%. RBA Governor Philip Lowe has raised interest rates for the eighth time in a row to combat persistent inflation.
Lowe of the RBA has announced a fourth straight OCR boost of 25 basis points to contain record inflation.
The RBA’s aggressive interest rate policy was generally expected after the Australian Consumer Price Index (CPI) surged to a record high in the Q4. Households in Australia’s regions are facing increasing cost of living pressures in the absence of signs of a reduction in national inflation rates.
AUDUSD Investors’ risk appetite has been boosted by easing US-China tensions.
Meanwhile, the softening of tensions between the United States and China has resulted in there is some hope for the Australian Dollar. US Vice President Joe Biden stated that the spy balloon incident has not harmed US-China ties. Aside from that, International Energy Agency (IEA) Executive Director Fatih Birol’s belief in China’s economy. Declaring that Half of the rise in global oil consumption this year will come from China,” has boosted the Australian Dollar.
It is worth mentioning that Australia is China’s largest trading partner, and growing optimism for China’s economic revival bolster the Australian Dollar.
The S&P500 futures’ rebound rise as investors shrugged off uncertainties over aggressive Fed bets has reduced the risk aversion theme. Improved risk appetite has also had an impact on the US Dollar Index (DXY), which has corrected to near two-year lows 103.10. The 10-year US Treasury bond return has fallen below 3.62%.
Later in the day, Fed Chair Jerome Powell’s remarks will be closely observed. Fed Powell’s speech will give hints regarding future monetary policy actions.
