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AUD/USD jumps to 3-week highs at 0.6675 after unexpected RBA rate hike

  • AUD/USD rises 60 points to 0.6675 after RBA rate hike
  • The RBA surprises markets with a 25 basis point interest rate hike.

AUD/USD soared 60 pips on the heels of news that the Reserve Bank of Australia (RBA) was raising interest rates by 25 basis points, surprising markets, which had expected no change at the meeting. June. The pair has risen to 0.66756, new three-week highs.

He RBA has raised its rates to 4.10% from the previous and expected 3.85%, reaching its highest rate since April 2012. In its statement, the entity has pointed out that this “additional increase in interest rates is to provide greater confidence that inflation will return to the target within a reasonable time.” The writing points to possible new rate hikesnoting that “further monetary policy tightening may be required to ensure inflation returns to target within a reasonable time frame, but that will depend on how the economy and inflation evolve.”

While waiting to digest the announcement, AUD/USD traders will be closely watching RBA Governor Philip Lowe’s speech in the coming hours, as well as Australian construction and manufacturing PMI data for April released. by AiG and the country’s GDP for the first quarter of the year. No relevant data will be published in the US beyond the IBD/TIPP economic optimism for June.

AUD/USD Levels

With the pair trading at time of writing above 0.6672, gaining 0.83% daily, resistance to overcome lies at the high of the day and the last three weeks at 0.6675. Above awaits the psychological zone 0.6700. A clear break above this region could send the AUD higher 0.6818May ceiling reached on the 10th and highest level seen since the end of February.

On the downside, immediate support is at 0.6600. Below, the low of June 5 in 0.6579 could serve as containment prior to a setback towards 0.64582023 floor reached on May 31.

Source: Fx Street

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