The Australian dollar rose against the US dollar on Tuesday, boosted by the unexpected 50 basis points increase in interest rates by the Bank of Australia. In the evening, market optimism in US stocks continued to rise, and the US dollar fell against most currencies. However, the yen is an exception, with the dollar / yen hitting a multi decade high.

After the Bank of Australia made an unexpected decision, Australian bond yields rose, and traders sold bonds in preparation for further interest rate hikes this year. Analysts took swift action and expected the RBA to raise interest rates more aggressively at its July meeting. Some economists worry that this upward trend may trigger a recession as households struggle to cope with high debt levels.

Soaring uranium prices boost the Australian dollar

Spot uranium prices continued to climb as the US government may lead an initiative to support the country's uranium supply and industry. As a major exporter of uranium, Australia may benefit from the rise in uranium prices. If the United States does so and establishes uranium reserves, it may tighten global uranium supply. Brazil recently relaxed the restrictions on uranium mining in response to the impact of the war in Ukraine.

The global economic recession is still a significant shadow over the market, which may continue to suppress market sentiment for the rest of the year as central banks tighten prices. A report released by the world bank shows concerns about the global economic recession.

The report shows that the global economic growth rate is expected to fall to 2.9% this year, far lower than the IMF forecast earlier this year. Despite the grim report, growth sensitive oil prices are still rising. The American Petroleum Institute (API) reported that the level of crude oil inventories in the United States has increased, which also failed to cool the price of WTI crude oil.

Due to inflation and wage backwardness, Japanese monetary policy makers have been reluctant to join the queue of monetary policy normalization in other countries. The Australian business confidence data for may released by nab and some charts of the RBA will be released later.

The Reserve Bank of India (RBI) is expected to raise the benchmark interest rate by 40 basis points, and the US dollar / Indian Rupee may be affected by this decline, especially if the Reserve Bank of India gets a hint from the Reserve Bank of Australia to raise interest rates significantly.

AUD / USD is trying to break through the 50% Fibo retreat upward, which is slightly lower than the peak in May. If it can break through these two points, it is expected to usher in more room for rise. MACD crosses the zero line, indicating that the action on the exchange rate is strengthening. On the contrary, if the Aussie dollar / US dollar falls here, it may fall to the 38.2% Fibo level.