The Reserve Bank of Australia has raised interest rates by 25bp to 4.00% following a board meeting on Tuesday. The move was as expected and was the fourth hike in the last five meetings, further indicating a fully recovering economy. The statement from the RBA focused on the fact that interest rates were still lower than average which is around 5.00%. This indicates that this will not be the last hike and we could see a further rise in interest rate next month, with targets of over 5.00% by the end of this year. If there is an improvement in next week's AUD Unemployment figures then we could possibly see a fifth rate hike in next month's interest rate decision.
The Aussie dollar hit a high of 0.9031 after the decision was announced but has since pulled back to around 0.8980 with some investors selling at the news.