AUD: Gains following RBA rate hike – Deutsche Bank

💡 DMK Insight

The RBA’s rate hike to 3.85% is a game-changer for the Aussie Dollar, and here’s why: When central banks raise rates, it typically boosts the local currency as higher yields attract foreign investment. For traders, this means the AUD could see upward momentum against major pairs, especially if the market anticipates further tightening. Keep an eye on the 0.65 level against the USD; a sustained break above could signal a bullish trend. However, it’s worth noting that the broader economic context, including global risk sentiment and commodity prices, could temper this rally. If commodity prices drop or global markets turn risk-off, the AUD might struggle despite the rate hike. Watch for reactions from institutional players; they often lead the charge in currency movements post-rate decisions. Also, monitor the upcoming economic data releases from Australia, as they could provide further insight into the RBA’s future policy direction. The immediate focus should be on how the AUD performs in the next few trading sessions as traders digest this news.