RBA surprises the market hiking 25bp against expectations

The Reserve Bank of Australia rate meeting today was supposed to be a done deal of another hold in rates, with futures markets pricing in an over 90% chance of that being the outcome.

The RBA however, showing their determination to get an inflation rate still well outside their target band instead delivered a 25bp hike after last months pause, surprising the market and seeing a dramatic reaction in the Aussie dollar (pump) and equity markets. (dump)

AUDUSD and ASX200 reaction:

Adding to this was what was see as a hawkish statement accompanying the decision, helping to cement the original moves which look now to have some legs, likely seeing the AUDUSD break the 0.67 level this session.

*RBA RAISES CASH RATE TARGET 25 BASIS POINTS TO 3.85%

*RBA: SOME FURTHER TIGHTENING OF MONETARY POLICY MAY BE REQUIRED

*RBA SAYS RATE RISE TO HELP ANCHOR INFLATION EXPECTATIONS