The Aussie dollar has bounced back from the Dubai Debacle (whereby the U.S. dollar strengthened on financial crisis fears) last Friday.
It’ll no doubt be further helped by news that Australia has hiked interest rates yet again, to 3.75%. This marks the third hike in Australia’s latest rising interest rate cycle.
This third interest rate hike stands in stark contrast to most developed nations who are too scared to tighten ultra-loose monetary policy. Why is the economy so much better down under? See it here.
Australia’s latest move is the right thing to do given the relatively strong economy, and it appears to have been expected.
Bloomberg: Investors bet there was a 76 per cent chance that Stevens would increase the benchmark rate by a quarter-point today, according to Bloomberg calculations based on interbank futures on the Sydney Futures Exchange at 11:51 a.m.