Commodities strengthened in Asian session today as the RBA unexpectedly raised the cash rate to 4.75%. Oil rose to 83.45 and gold climbed to 1357.2 after the news. The first rate hike in 6 months was to combat inflation which may accelerate in the medium term. The decisions caught the market by surprise as the Australia’s CPI was disappointing in 3Q10. The interest rate differential between AUD and USD widened, sending AUD closer to parity with USD.
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Commodities Rally as RBA Unexpectedly Raises Rate
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