The Central Bank of Australia (RBA) decided to continue to hold the interest rate unchanged at a low of 0.10% but signaled a possible first rate increase since 2010.
Even though there were only a few minor changes by the RBA in their reality today but it does give a big meaning to the market as the base bettors are seen to have started to tend to be more hawkish.
Contrary to the reality in the Mac edition of the meeting, the RBA no longer promises to be 'patient' in following inflation developments before deciding on a baseline.
According to Gabenor Philip Lowe's latest statement, the central bank acknowledged that inflation has increased and is likely to continue to climb higher while the unemployment rate has also fallen faster than anticipated to the 4.0% level.
After that, fundamentalists will assess future trends in inflation and wage growth in setting a baseline to support full employment in Australia and inflation results in line with targets.
In addition, basic investors will see real evidence that inflation is continuing within the target range of 2% to 3% before they increase profitability.
Following Lowe's statement, investors now expect the RBA to begin its tightening cycle in the coming months and this has propelled the Aussie dollar's surge to its most recent high since Jun 2021.
