At its May monetary policy meeting, the Reserve Bank of Australia (RBA) board members decided to lift the Official Cash Rate (OCR) by 0.25% to 3.85%. That said, market players widely anticipated the Aussie central bank’s inaction, which in turn gave rise to a strong reaction to the RBA's surprise move.

AUD/USD reaction

Following the Aussie central bank’s surprisingly hawkish move, the AUD/USD pair rallies nearly 60 pips to 0.6684. With this, the pair is trading up for the third consecutive trading day.

Also read: AUD/USD Price Analysis: Well set for further downside past 0.6650 on RBA Day

AUD/USD: 15-minute chart

Trend: Further upside expected

About RBA rate decision

RBA Interest Rate Decision is announced by the Reserve Bank of Australia. If the RBA is hawkish about the inflationary outlook of the economy and rises the interest rates it is positive, or bullish, for the AUD. Likewise, if the RBA has a dovish view on the Australian economy and keeps the ongoing interest rate, or cuts the interest rate it is seen as negative, or bearish.