AUD deflated on rate cut talk – Westpac
Sean Callow, analyst at Westpac, points out that the Australia’s below-consensus inflation reading has stoked a fresh wave of pricing for RBA rate cuts.
Key Quotes
“A cut to 1.25% had only been fully priced by the Oct 2019 meeting but after CPI it was priced by June, with the chance of a May cut – in the heat of the election campaign no less – around 2/3.”
“The debate over the RBA policy outlook will dominate discussion near term, with little on Australia’s data calendar to provide fresh direction. This is likely to keep AUD/USD on the back foot in the week ahead.”
“Adding to the pressure on AUD/USD in the week ahead should be a firmer US dollar, backed by upward revisions to US Q1 GDP forecasts (due Fri). But downside on the Aussie could be contained by a more positive global mood e.g. record highs for US equities and China’s stronger March data. The RBA will be making note of these developments too.”
Author
Sandeep Kanihama
FXStreet Contributor
Sandeep Kanihama is an FX Editor and Analyst with FXstreet having principally focus area on Asia and European markets with commodity, currency and equities coverage. He is stationed in the Indian capital city of Delhi.
