At its December 6 monetary policy meeting, the Reserve Bank of Australia (RBA) board members decided to raise its official cash rate (OCR) by another 25 basis points (bps) from 2.85% to 3.10%, as widely expected.

Tuesday’s rate hike decision marked the third straight quarter percentage point increase by the RBA, summing up to a total of 300 bps in rate increases in eight months.

According to the latest Reuters poll, the median expectation is for a 3.60% terminal rate.

AUD/USD reaction

In an immediate reaction to the RBA decision, the AUD/USD pair jumped nearly 15 pips to 0.6730. At the time of writing, the aussie is up 0.37% on the day, trading at 0.6721.

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.