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Australian dollar slides below 0.7000 after hawkish RBA signals

The RBA lifted its benchmark rate 25 basis points to 4.6%, the highest in 15 years, while flagging that rates could rise again if needed.

Reported · Written up by our desk · Major Pairs

The Australian dollar extended its losses against the US dollar on Tuesday, with AUD/USD falling below 0.7000 to hit fresh two month lows at 0.6978, following the Reserve Bank of Australia’s hawkish stance.

FXStreet reports the RBA raised its benchmark interest rate by 25 basis points to 4.6%, its highest level in 15 years, and its statement pointed to upside inflation risks from high energy prices and signs of slowing growth, while leaving open the possibility of further tightening.

RBA Governor Michelle Bullock reaffirmed those views, saying the Middle East conflict has accelerated inflationary pressures, that the board will raise rates again if needed, and that a pause was considered at Tuesday’s meeting with options left open for September. She also said recession is not the central base case, and unemployment remains quite low by historical standards.

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