AUDUSD Deepens Slide After RBA Rate Decision

Published on Nov 07, 2023 10:58

The Australian dollar plunged sharply against the dollar following a 25 bps rate hike by the Reserve Bank of Australia citing stubborn inflation levels. RBA raised the Official Cash Rate (OCR) from 4.10% to 4.35% after keeping the benchmark interest rate steady for four consecutive meetings. AUDUSD is currently quoting at 0.644, down 0.87% on the day. Meanwhile, added strength in the dollar on the back of renewed gains in the US benchmark treasury yields to 4.6% after hawkish comments reported from Minneapolis Federal chief Neel Kashkari indicating he is still leaning toward raising interest rates again to bring inflation down to the central bank`s 2% target, added pressure on the pair. The dollar index bounced back above 105 mark and is currently quoting at 105.25, up 0.2% on the day. Besides, weak data from China, its top trading partner, showing a decrease in the surplus balance against the market expectations of an improvement also weighed on the Aussie dollar. China`s Trade Balance data for October revealed a decrease in the surplus balance at $56.53B against the market expectations of an improvement to $81.95B from the previous readings of $77.71B.