The key reason the RBA slower rate hike is not applicable to elsewhere

Yesterday the Reserve Bank of Australia raised its cash rate by 25bp, short of the +50 the consensus were expecting:

• ForexLive Asia-Pacific FX news wrap: RBA surprises, smaller than expected 25bp rate hike

Via Scotia overnight, a discussion on why I think the narrative that what the RBA did carries lessons for the rest of the world is exaggerated.

Scotia says the "key" reason

• is that maybe the RBA just felt that pricing for the terminal rate was getting too aggressive at 4¼% pre-meeting. Governor Lowe said last month that he hoped the cash rate would come to rest within a 2.5–3.5% rate with ‘a few’ more rate increases over coming meetings. Well, markets are now more aligned with the upper end of that range after the decision.
• The RBA didn’t turn more dovish relative to its prior guidance on the terminal rate; it only did so relative to markets that didn’t listen. You don’t have that same issue with pricing for the Fed, for instance, given broad alignment toward the dots.

AUD/USD update. trailing the pack after the RBA yesterday:

eur EUR The euro (EUR) is the official currency of the European Union (EU) and 19 of 27 member states at the time of writing. It is the second most-traded currency worldwide in forex markets after the US dollar.The euro was originally introduced back on January 1, 1999, having replaced the European Currency Unit. Banknotes and physical euro coins subsequently entered circulation only in 2002.Upon its adoption, the euro replaced domestic currencies in participating EU member states. The rise in its value The euro (EUR) is the official currency of the European Union (EU) and 19 of 27 member states at the time of writing. It is the second most-traded currency worldwide in forex markets after the US dollar.The euro was originally introduced back on January 1, 1999, having replaced the European Currency Unit. Banknotes and physical euro coins subsequently entered circulation only in 2002.Upon its adoption, the euro replaced domestic currencies in participating EU member states. The rise in its value Read this Term