The Australian dollar has reacted lower against the US dollar after it became known that the Reserve Bank of Australia (RBA) met expectations and increased its interest rates by 50 basis points to 1.35%.
The AUD/USD has fallen 35 pips, slipping to daily lows at 0.6852. The lack of surprise in the announcement has favored the movement. At time of writing, the pair is trading above 0.6860, down 0.07% so far on Tuesday.
In its statement, the RBA expects inflation to peak at the end of this year and fall back into the 2-3% range next year. He also notes that today’s interest rate hike is a further step in the withdrawal of extraordinary monetary support that was put in place to help insure the Australian economy against the worst possible effects of the pandemic. The resilience of the economy and higher inflation mean that this extraordinary support is no longer necessary. The Board expects to take further steps in the process of normalizing monetary conditions in Australia in the coming months.
Traders in the pair face a day without further relevant data from the United States, which will only publish its factory orders for May.
AUD/USD Levels
In case of increasing the decline, the first support appears at the low of the closing of the American session yesterday, 0.6840. Further down expect the region around 0.6760/65where are the two-year lows recorded on Friday, July 1.
In case of regaining ground, the initial resistance is at 0.6896ceiling today, and in 0.6920, maximum of June 30. Above, the target is in 0.6960the highest level since June 28.
Source: Fx Street
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