AUD/USD to move downward as market is too aggressive pricing RBA rate hike – Danske Bank
The Reserve Bank of Australia (RBA) has been among the central banks where market pricing has diverged to a clearly more hawkish path compared to the official forward guidance. The aussie was little affected by the RBA’s October meeting Minutes, heading higher. However, economists at Danske Bank expect the AUD/USD pair to edge lower.
No rate hikes until 2024
“In its October minutes, RBA dovishly stated that while wage pressures were emerging in certain parts of the world, this was not the case in Australia.”
“It continues to signal no rate hikes until 2024, even though market prices in the first hike already by H2 2022”
“We continue to see market pricing as too aggressive, and expect to see lower AUD/USD also on the back of Chinese-driven weakness in key Australian export commodity prices and broad USD strength.”
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FXStreet Insights Team
FXStreet
The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.
