RBA governor Lowe surprised markets by hiking interest rates 25 points to 0.35% instead of the widely predicted 15 point move. The Australian Dollar (AUD) rose to 0.7260 levels soon after against the US Dollar (USD) but failed to consolidate here. Thursday’s Federal Reserve continued their tightening of policy, hiking the cash rate to 1.0% from 0.50%, Powell saying he would most likely repeat the hike at the next June meeting but warned against rising to fast as this could strangle the economy and send it towards a recession. Predictions are for the Fed to raise rates to about 3.25% peaking around the end of 2023. Equity indices and commodities were all lower overnight as the balance of “risk” flow turned for the worst taking the pair back to 0.7080. US Non-farm Payroll tomorrow morning will stir up the usual dose of volatility.
The current interbank midrate is: AUDUSD 0.7118
The interbank range this week has been: AUDUSD 0.7027- 0.7263