Breaking: RBA surprises markets with rate hike to 3.85% in May, AUD/USD rallies
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At its May monetary policy meeting, the Reserve Bank of Australia (RBA) board members decided to lift the Official Cash Rate (OCR) by 0.25% to 3.85%. That said, market players widely anticipated the Aussie central bank’s inaction, which in turn gave rise to a strong reaction to the RBA's surprise move.
AUD/USD reaction
Following the Aussie central bank’s surprisingly hawkish move, the AUD/USD pair rallies nearly 60 pips to 0.6684. With this, the pair is trading up for the third consecutive trading day.
Also read: AUD/USD Price Analysis: Well set for further downside past 0.6650 on RBA Day
AUD/USD: 15-minute chart
Trend: Further upside expected
About RBA rate decision
RBA Interest Rate Decision is announced by the Reserve Bank of Australia. If the RBA is hawkish about the inflationary outlook of the economy and rises the interest rates it is positive, or bullish, for the AUD. Likewise, if the RBA has a dovish view on the Australian economy and keeps the ongoing interest rate, or cuts the interest rate it is seen as negative, or bearish.
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