AUD: what a surprise! Overview for 06.06.2023

The Australian dollar is in a real rally against the US dollar. The current AUDUSD quote is 0.6658.

The Reserve Bank of Australia at the meeting on Tuesday unexpectedly raised the interest rate by 25 basis points, which was a total surprise for the market. The rate now stands at 4.1% per annum. This is an 11-year high for the indicator.

The RBA stated in a commentary that the hike would bring inflation to target levels within a reasonable time frame. Consumer prices in Q1 2023 rose by 7% y/y, exceeding the expectation of 6.9%. Behind the market scenes, it is said that many will find this step difficult to understand because the regulator has stopped being consistent in its decisions.

The indicator has already risen by 400 basis points since last May when the active rate hike cycle began.

An interest rate hike is a mighty support trigger for the AUD.