RBA interest rates preview: What to expect in AUD/USD?

By FXStreet FXStreet (Bali) – The Australian Dollar, unlike the Euro or Pound, managed to make some further progress against the US Dollar during Monday, on the back of a disappointing US NFP last Friday, and with the focus now shifted towards the RBA monetary policy decision.

RBA expected to stay on hold

According to recent surveys, including the last published by Bloomberg – based on 27 forecasters – a no change in policy is expected. If one refers to the OIS pricing, chances of a 25bp rate cut at today’s meeting stand at 34%, suggesting that the possibility of further easing should not be completely ruled out, although it would definitely be a major shocker for the market and for the AUD.

One of the pressing issues for the RBA to ease further might be the fact that the Fed is now expected to remain on hold, at least, until March next year, according to the Fed fund futures pricing, standing at around 50% for March, with chances for Dec down to just 30%. However, the RBA rhetoric on the local currency has eased, communicating to the market that at around current levels (between 0.70-75), the Central Bank finds it more comfortable. Besides, revised …read more

Source:: FX Street