The economists of ING analyze how Tuesday's RBA meeting could affect the Australian Dollar (AUD).
The RBA still has reasons to maintain its hawkish bias
The RBA announcement carries some downside risks for the Australian Dollar, as the unexpected flattening of the January CPI at 3.4% could lead policymakers to open the debate on rate cuts. However, we are not convinced that this will happen.
The Reserve Bank of Australia still has reasons to maintain its hawkish biasgiven its lower policy rate than other major central banks, the recent hawkish repricing of global rate expectations, and persistent risks of a pick-up in inflation.
We like the prospects for a sustained AUD rally starting in the second quarter and aren't too worried about the RBA getting in the way.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
