AUDUSD is rising after a major plunge this week.
The Australian Dollar is strengthening against the USD on Thursday. The current quote for the instrument is 0.6985.
The Reserve Bank of Australian had another meeting this week where it raised the benchmark interest rate by 50 basis points, from 1.35% to 1.85%. The rate hike was expected, hence no surprises for investors.
In the comments, the RBA said that the rate was raised as a part of monetary policy normalisation. At the same time, the regulator’s rhetoric changed, became more aggressive, and clearly sounded like it would continue tightening its monetary policy and raising rates.
By doing this, the RBA sticks to a global approach of rate hikes and doesn’t allow carry trade investors to interfere with currency trading – spreads between the rates are not so big.
As for the national currency, the rate hike is rather negative for the Aussie.
One report published yesterday showed that Retail Sales added 0.2% m/m in July, the same as expected. Australia is going through a season of low consumption, that’s why weak readings might be temporary.