At its meeting today, the Board decided to increase the cash rate target by 25 basis points to 3.85 per cent. It also increased the rate paid on Exchange Settlement balances by 25 basis points to 3.75 per cent. Inflation in Australia has passed its peak, but at 7 per cent is still too high and it will be some time yet before it is back in the target range. Given the importance of returning inflation to target within a reasonable timeframe, the Board judged that a further increase in interest rates was warranted today. The Board held interest rates steady last month to provide additional time to assess the state of ... (full story)

At its May monetary policy meeting, the Reserve Bank of Australia (RBA) board members decided to lift the Official Cash Rate (OCR) by 0.25% to 3.85. That said, market players widely anticipated the Aussie central bank’s inaction, which in turn gave rise a stark reaction to the surprise move. AUD/USD reaction: Following the Aussie central bank’s surprisingly hawkish move, the AUD/USD pair rallies nearly 60 pips to 0.6684. With this, the pair is trading up for the third consecutive trading day. AUD/USD: 15-minute chart: {chart} (full story)