ForexLive Asia-Pacific FX news wrap: RBA hikes cash rate by 25bp as expected

The
final Reserve Bank of Australia policy meeting for the year was the
main focus of the session. The RBA delivered an ‘as expected’
cash rate hike of 0.25% that takes it to 3.1%.

The
statement from Governor Lowe was strongly suggestive of further rate
hikes to come.

The Bank next meets on February 7, there is no January
meeting.

The
Australian dollar popped a few tics higher after the announcement and
the not dovish statement.

Prior
to the RBA decision from Australia was Q3 current account data. The
current account fell into a deficit of AUD2.3bn in the quarter,
down from a surplus of AUD14.7bn in Q2. It is the first current
account deficit since Q2 of 2019. Contributors were:

• prices
  for resource exports fell back
• robust
  domestic demand pulled in more imports
• The
  Australian Bureau of Statistics also noted “high operating
  profits, and increased non-resident investment in resource sector,
  which led to strong dividend payments to non-resident portfolio
  investment.”

We
get data for Q3 GDP tomorrow (Wednesday, 7 December 2022 at 0030 GMT)
from Australia. Net exports will take 0.2% from GDP.

–

In
the earlier part of the session we had a very small retrace move for
the US dollar pretty much across the majors board. The USD had
strengthened on Monday, US time, following a strong services PMI
result. After the small retrace in the Asian morning we had a pop
back up for the USD. USD/JPY traded above 137.00. EUR, GBP, AUD, NZD
all fell a touch, but didn’t make fresh lows (compared with Monday
US time) like the yen did. A bid for oil helped CAD to remain more or
less steady.

–

In sad news, Emmy award-winning actor Kirstie
Alley passed away. A great entertainer. RIP.