Australian Central bank increases interest rates to 0.85% with a 0.50% rate hike. The AUD sells as the U.S. Dollar gains bids, the U.S rate is at 1.00%. Energy/Food inflation is now chronic, seeping into everything. Will the Fed drop the big one at their June meeting?

Chart 1

Chart 2

The Reserve Bank of Australia (RBA) have increased the Australian interest rate to 0.85% with a 50 basis point increase 7/06/2022, still 25% below the U.S interest rate, which is essentially below the 2% that the Federal Reserve maybe aiming for, which is probably still below in tacking inflation breaking out everywhere lead by a oil price that doesn't seem to want to fall beneath $100 (Putin 'put').  Chart 1 shows this perspective via the overlay of the U.S. Dollars futures price over the AUD/USD exchange rate, the AUD has been trading sideways since June between 0.71 and 0.72, it did not rally via the RBA interest rate hike, because the U.S rate is, as mentioned, above the Aust rate.   The U.S. Dollar is now in rally mode on the back of the very distinct possibility that the American CPI has blown out over 8%, with the oil/food inflation now creeping into every thing.  The Fed may very well trigger a 0.75% rate hike at their June 14th meeting, rather than 0.50%

Chart 2, shows the incline trading range of the AUD, which if I am right, will fall below the 0.71 support.  A. 0.82% sell off in two days (or less).

___

Trade at own risk.