The RBA made its interest rate decision at 03:30 am GMT. The central bank raised rates to 3.1% from 2.85%, strengthening the Australian dollar in the FX market.
Although the council has indicated that it may raise interest rates further, the first signs of tapering off can be seen. Bankers' comments suggested that specific actions are not predetermined, suggesting that obstacles to continuing the cycle have increased. The condition of the labor market seems particularly important in this regard. The central bank reaffirmed its forecast that inflation will peak near 8% in Q4 as global supply pressures weaken, commodity prices fall and demand slows. Comments in the RBA statement regarding the recent decline in job openings, as well as an expected slowdown in household spending, suggest that the impediment to further tightening has increased.
Market valuations for the cash rate have been significantly reduced in recent weeks, but still point to a peak near 3.6%. Source: Bloomberg
AUD is one of the best performing G10 currencies in the FX market. Source: xStation 5
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