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The Reserve Bank of Australia rate meeting today was supposed to be a done deal of another hold in rates, with futures markets pricing in an over 90% chance of that being the outcome.
The RBA however, showing their determination to get an inflation rate still well outside their target band instead delivered a 25bp hike after last months pause, surprising the market and seeing a dramatic reaction in the Aussie dollar (pump) and equity markets. (dump)
AUDUSD and ASX200 reaction:
Adding to this was what was see as a hawkish statement accompanying the decision, helping to cement the original moves which look now to have some legs, likely seeing the AUDUSD break the 0.67 level this session.
*RBA RAISES CASH RATE TARGET 25 BASIS POINTS TO 3.85%
*RBA: SOME FURTHER TIGHTENING OF MONETARY POLICY MAY BE REQUIRED
*RBA SAYS RATE RISE TO HELP ANCHOR INFLATION EXPECTATIONS
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