The Australian dollar has level-pegged with the U.S. dollar for the second time in three weeks after the Reserve Bank of Australia (RBA) unexpectedly raised its official interest rate to 4.75%.The RBA's decision on Tuesday prompted a 1USc rally in the Aus
The Australian dollar has level-pegged with the U.S. dollar for the second time in three weeks after the Reserve Bank of Australia (RBA) unexpectedly raised its official interest rate to 4.75%.
The RBA’s decision on Tuesday prompted a 1USc rally in the Aussie dollar, taking it to $US1.0013 – is highest point since the currency was floated in 1983.
Against the Aussie dollar, the kiwi plunged to 76.64Ac after the RBA’s rate call, having earlier traded at 77.54Ac. The local currency has since recovered somewhat to 77.21Ac.
The kiwi has fared better against the steadily wilting U.S. dollar.
Australia’s official rate is now 1.75 percentage points higher than the Reserve Bank of New Zealand’s (RBNZ) official cash rate, which sits at 3.0%.
The RBNZ is set to review its official cash rate on December 9.
A strong Australian dollar is a headache for the Australian central bank and for Australian companies with overseas exposures.
