{"id":61659,"date":"2023-05-02T11:08:11","date_gmt":"2023-05-02T08:08:11","guid":{"rendered":"https:\/\/ironfx-com-php8.wp-dev.int.theitops.net\/?p=61659"},"modified":"2025-10-17T09:54:55","modified_gmt":"2025-10-17T06:54:55","slug":"rba-surprises-the-markets-by-hiking-rates","status":"publish","type":"post","link":"https:\/\/www.ironfx-id.com\/ar\/rba-surprises-the-markets-by-hiking-rates\/","title":{"rendered":"RBA surprises the markets by hiking rates"},"content":{"rendered":"

The USD edged a bit higher against its counterparts yesterday, as the ISM manufacturing PMI figure noted another contraction of economic activity for April this time, yet not as wide as initially expected. Hence, we expect traders undistracted now, to turn their attention fully towards the Fed\u2019s interest rate decision on Wednesday. On the flip side, JPY continued its downward trajectory not only against the USD but also against the EUR, against which it reached a 15-year low, as JPY traders remain disappointed by the steadily dovish BoJ, which in turn tends to widen the monetary policy outlook differentials. Overall we tend to maintain the view that the bank under its new Governor Mr. Ueda, is to approach any alteration in its ultra-loose monetary policy settings only with a gradual approach, especially given that Japanese businesses got accustomed over the past years to cheap money. In contrast to JPY, AUD jumped at today\u2019s late Asian session as RBA took the markets by surprise and hiked rates by another 25 basis points, may we remind you that market expectations were for the bank to remain on hold, hence monetary policy differentials widened further in favour of the Aussie today. In Governor Lowe\u2019s accompanying statement<\/a> the bank stated that \u201cInflation in Australia has passed its peak, but at 7 per cent is still too high\u201d in explaining its decision to hike rates again after a pause. In its forward guidance, RBA stated that \u201cSome further tightening of monetary policy may be required to ensure that inflation returns to target in a reasonable timeframe\u201d which maintains an element of hawkishness in the bank\u2019s intentions. In the European theatre, we note today the release of Eurozone\u2019s preliminary HICP rate for the month of April a rate that may play a key role in ECB\u2019s interest rate decision on Thursday after the mixed signals from the HICP rates of Germany and France. US stock markets ended their day with mixed signals yesterday and we expect traders to continue to navigate between the market worries for a possible recession of the US economy and earnings reports due out. Overall Monday\u2019s opening tended to imply that the positive market sentiment came to a halt and the market is in a make-or-break position, given the packed with high-impact releases due out in the following days. For today we note the release of the earnings reports of Pfizer (#PFE), Lyft and Uber among others.<\/p>\n\n\n\n

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