In the Asian session on Wednesday (June 7), the Australian dollar/dollar fell back from its highs and temporarily reported at 0.6685, an increase of 0.18%. The pace of rate hikes by the RBA is unprecedented and will not have an impact on the economy.
The latest news from the Commonwealth of Australia:
The move came after the Reserve Bank of Australia surprised markets by raising its cash target rate to 4.10%, citing concerns that service sector inflation was creeping deeper into the economy. The RBA also noted that house prices are rising again, a potential signal that it believes the economy is more resilient than previously expected. Economist Diana Mousina said: “The 4 per cent increase in interest rates since May last year means that it has become much more difficult for the economy to remain ‘flat’ as the RBA and most others are forecasting and risking pushing the economy back to the top.” The real risk of a recession, which we see at 50% over the next 12 months.”
