The Australian Dollar (AUD) was on the move Tuesday rising to 0.6715 against the US Dollar (USD) post the RBA rate announcement. In a surprise move the central bank raised rates to 4.10% from 3.85% after markets expected no change. Wage pressures and stubborn inflation are the main cause. The Fair Work Commission just announced a 5.75% wage increase in the minimum wage arguing that it wouldn’t add to inflation, but the stakes of further hikes increased. The RBA is likely to raise rates again at the July meeting. Meanwhile interestingly Australia’s economy grew by only 0.2% in the first quarter of 2023 raising questions of the RBA’s thinking. The overall slowdown in the economy will test their confidence that a recession will be avoided.
The current interbank midrate is: AUDUSD 0.6661
The interbank range this week has been: AUDUSD 0.6578- 0.6716