At its July 5 monetary policy meeting, the Reserve Bank of Australia (RBA) board members decided to raise the official cash rate (OCR) by 50 basis points (bps) from 0.85% to 1.35%, as widely expected.

A Reuters poll of 33 economists showed the RBA will increase its cash rate by another 50 bps to 1.35% in July. One economist predicted a 25 bps hike.

AUD/USD reaction

The AUD/USD pair was little changed in an immediate reaction to the expected 50 bps RBA rate hike.

The delayed reaction, however, saw the aussie falling 20 pips to near 0.6865, down 0.05% on the day.

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.