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The Reserve Bank of Australia (RBA) published the minutes of its 18 June policy meeting last night that confirmed that board ultimately saw the case for a hold, ING’s FX strategist Francesco Pesole notes. Rate hike isn’t ruled out “RBA published the minutes of its 18 June policy meeting last night. It was confirmed that board discussed raising rates but ultimately saw the case for a hold as the “stronger one”, although it is not ruling anything in or out in terms of future policy moves.” “Remember that the meeting was followed by a major inflation surprise in the May read, which rose from 3.6% to 4.0% year-on-year. There is a non-negligible risk the RBA will raise rates again (around 50% priced in by November), and the second quarter CPI report on 31 July will be a make-or-break event. Another inflation surprise and a rate hike will be a very tangible possibility.” “That possibility is keeping us confident that the Australian Dollar (AUD) will have a strong summer. As we see US macro data endorsing rising dovish bets in the US, we think high-beta currencies can do well and markets will reward especially those that can count on hawkish domestic central banks. A move to 0.68 in AUD/USD remains our base case.”   Source: https://www.fxstreet.com/news/aud-rba-keeps-rate-hike-on-the-table-ing-202407021440

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Filed under: News - @ July 2, 2024 10:24 pm