July 04, 2023 7:36 AM

Breaking News: RBA interest rate keeping steady at 4.10% in July

The Reserve Bank of Australia (RBA) board members agreed to keep the Official Cash Rate (OCR) at 4.10% at its July policy meeting. It's upsetting the markets.

According to the most recent Reuters survey, analysts are almost evenly divided, with 16 of 31 expecting another 25 basis point raise to 4.35% at the July 4 meeting. The remaining 15 anticipated a brief break. The Australian central bank lifted interest rates by 25 basis points in May and June, delivering two straight hawkish shocks.

Reaction to the AUD/USD

The AUD/USD pair decreased nearly 40 pips in response to the RBA announcement at 0.6650. On the day, the pair is down 0.25%.

Concerning the RBA's rate decision

The Reserve Bank of Australia announces its interest rate decision. If the RBA is concerned about the economy's inflationary prospects and raises interest rates, the AUD will strengthen. Similarly, if the RBA has a dovish assessment of the Australian economy and maintains or decreases interest rates, it is regarded as negative, or bearish.