Aussie flies as RBA unexpectedly increases cash rate by 0.25% bp.

The aussie is boosted across the board as The Reserve Bank of Australia unexpectedly increased rates from 3.0% to 3.25%. The RBA is the first central bank that started to tighten its monetary policy lifting the cash rate from it's 49 years low. What central bank is next?

Against the greenback the aussie advanced from 8754 to 8918 (for now). Against the sterling, the aussie also appreciated considerably dragging the GBPAUD pair from 1.8219 to 1.7861 (current lows). This move was exacerbated by much worse than expected GBP manufacturing production coming at -1.9% vs exp. +0.4%. As a consequence GBP is a relative strength loser.

USD index broke below it's uptrend support around 76.55 area and reached a low of 76.15. If 76.00 gives way another round of USD selling will be upon us. The talk of meetings among Arab states, China, Russia and France to stop using USD for oil trading certainly did not help the buck.

When it comes to trading, we can expect few more sessions of AUD strength, so continue to buy on pullbacks. EURCHF is close to 1.51 again so buying with expectation of SNB intervention, or at least a talk of intervention that would push EURCHF up makes sense.