Australia interest rates increase, a surprise

The Reserve Bank of Australia (RBA) made a surprising move last week by raising Australian interest rates by 25 basis points, bringing the cash rate to 4.1%.

This marks the highest level since 2012, catching most analysts off guard as they had anticipated the RBA to maintain the status quo. RBA Governor Philip Lowe, during the subsequent press conference, hinted at the possibility of further tightening measures.

The unexpected rate hike and the prospect of future increases sparked notable gains in AUD/USD, with the currency pair surging to a peak of 0.6680, reaching its highest level since mid-May. NZD/USD also followed suit, albeit to a lesser extent, climbing to as high as 0.6100.

This decision by the RBA has reverberated across the currency market, injecting volatility and generating heightened interest. The landscape remains dynamic and unpredictable, warranting a cautious approach for anyone trading AUD.

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