A$ Falters Post +25bps RBA Hike
AUD/USD has faltered post the RBA hike. We are off around 0.40%, last near 0.6460/65. We were in the 0.6480/85 region prior to the announcement. The +25bps move was largely forecast by sell-side economists and nearly priced in by rates markets prior to the outcome. The statement didn't explicitly state there may be the need for further tightening, which has been present in previous statements.
- The market may interpret this as signaling the central bank is now at neutral. The RBA still left the door ajar for further hikes, but these are very much data dependent. More details to follow.