Skip to content

We want to clarify that IG International does not have an official Line account at this time. We have not established any official presence on Line messaging platform. Therefore, any accounts claiming to represent IG International on Line are unauthorized and should be considered as fake.
CFDs are complex instruments. 72% of retail client accounts lose money when trading CFDs, with this investment provider. You can lose your money rapidly due to leverage. Please ensure you understand how this product works and whether you can afford to take the high risk of losing money.
CFDs are complex instruments. 72% of retail client accounts lose money when trading CFDs, with this investment provider. You can lose your money rapidly due to leverage. Please ensure you understand how this product works and whether you can afford to take the high risk of losing money.

The RBA raises interest and targets inflation

The Australian Central Bank has now raised interest rates by 2.75% over seven months and continues to signal further tightening with a focus on the labour market and domestic demand.

Source: Bloomberg

RBA's November meeting

As expected, the RBA decided to increase the cash rate target by 25 basis points to 2.85 percent. The Australian Central Bank has now raised interest rates by 2.75% over seven months and continues to signal further tightening with a focus on the labour market and domestic demand.

Furthermore, the RBA has revised its forecast for the inflation path from a previous forecast of 7.75% to 8%.

While the RBA is confident that inflation will decline next year due to “the ongoing resolution of global supply-side problems”, medium-term inflation expectations remain well above the Bank’s ideal zone. It is expected that inflation will sit around 4.75% in 2023 and a little above 3% in 2024.

What’s next for the RBA?

While the RBA has a mandated target of 2 to 3% on average, this further increase in inflation is poised to extend its tightening journey, potentially to the third quarter of 2023.

As shown in the future market’s yield curve chart, the market participants now expect the RBA will keep hiking rates to around 3.8% by next August. In the near term, the odds for December’s rate decision are primarily pointing to another 25 bps increase.

However, RBA governor Philip Lowe didn’t rule out the possibility of returning to a sizable hike, stating in a speech this week, "If we need to step up to larger increases again to secure the return of inflation to target, we will do that.”

Source: ASX

AUD/USD

Thanks to the softer greenback, the AUD/USD has consolidated around the 64 cent level from the previous week.

The 23.6% Fibonacci retreatment is a major hurdle for the price to clear before touching on the 50-day MA (around 0.65). On the other hand, any retreat should find support from the 20-day SMA, now sitting at 0.6328.

AUD/USD daily chart

Source: IG

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.

Start trading forex today

Trade the largest and most volatile financial market in the world.

  • Spreads start at just 0.6 points on EUR/USD
  • Analyse market movements with our essential selection of charts
  • Speculate from a range of platforms, including on mobile

Find out more

Live prices on most popular markets

  • Forex
  • Shares
  • Indices

You might be interested in…

<h3>How much does trading cost?</h3>
<h3>Find out about IG</h3>
<h3>Plan your trading</h3>

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.