The Australian Dollar (AUD) traded back to 0.6850 (1.4600) post the RBA statement and rate release boosted by a surprise extra hike. The central bank hiked their interest rate from the long term 0.10% to 0.35% slightly more than the 15 points markets were predicting, helping to rally the AUD. Given only a couple of months back the RBA were adamant they were not moving rates until well into 2023 this confirmed a real mood shift in the first hike in the new tightening cycle. The RBA will start backing off bond buying and updated their inflation forecast from 5.1% to 6.0%. Governor Lowe said growth for 2022 was expected to be around 4.25% and will drop to 2.0% in 2023 with households and businesses in good shape- for now. The ECB have been talking of a possible rate hike on the horizon which should support the EUR in the near to medium term. Risk sentiment took a dive overnight with the US indices all down over 4% taking the AUD/EUR to 0.6750 (1.4820).
The current interbank midrate is: AUDEUR 0.6750 EURAUD 1.4814
The interbank range this week has been: AUDEUR 0.6682- 0.6850 EURAUD 1.4598- 1.4965