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RBA hikes rates to 2.35%

The Reserve Bank of Australia on Tuesday (6th) announced a 50 basis point interest rate hike, pushing its official interest rate to 2.35%. In his statement, RBA Governor Lowe said that maintaining price stability is a prerequisite for the long-term development of the economy and employment. The implication is that Lowe seems to be inclined to continue raising interest rates. The market now estimates that the RBA will continue to raise interest rates at the October 4 interest rate meeting, but the rate of increase is expected to be only 25 basis points, and the probability is the market consensus. Judging from the recent economic figures released by Australia, such as the unemployment rate falling to only 3.4%, the lowest since 1974, and strong exports, it seems that the RBA's series of interest rate hikes will not have any negative impact on the Australian economy for the time being. Although the basic factors of the Australian dollar are good, the analysis of the trend of the Australian dollar cannot ignore the changes in the two major currencies in the region, namely the trend of the RMB and the Japanese yen. Recently, the renminbi fell notably below the 6.97-to-dollar level, while the yen fell nearly 142 to the dollar. Australia's exports are mainly to Asia, China and Japan are its two largest export markets.
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