The RBA raised rates by 25bp as expected bringing the cash rate to 3.35%. Since the statement clearly stated that rates will need to rise further and more than once, it appears that the cash rate is likely to head towards 4% and if domestically-driven inflation isn’t contained possibly beyond.
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USDCAD finished the week on a distinctly bearish note, with solid Canadian jobs data prompting a broad wave of CAD strength. This put prices below the week’s 1.3470 low and within range of key support at the 1.3385 level - the Dec 5 low. Further weakness will be needed, however, before the bullish trend condition fades and the bear trigger at 1.3226 can be considered. Last month's break of trendline resistance, drawn from the Oct 13 high, strengthened the bullish case and this has opened 1.3751, the Nov 4 high.
AUDUSD finished the week close to the best levels, bouncing off support after a spell of weakness Tuesday. This keeps a bullish theme in place and the recovery Wednesday supports the view that moves lower should be considered corrective. Support at the 50-day EMA - at 0.6699 - remains intact for now. A clear break of this EMA is required to suggest scope for a deeper pullback and 0.6629, the Dec 20 low, is seen as a key short-term bear trigger. A resumption of gains would refocus attention on 0.6893, the Dec 13 high and bull trigger.