AUD/USD: Aussie to benefit if the RBA emphasizes the possibility of further hikes – Commerzbank

The Reserve Bank of Australia (RBA) will hold its monthly meeting on Tuesday. The key question is whether the RBA will take a break in its rate hike cycle and how it expects interest rates to develop in the near future, economists at Commerzbank report.

Will the RBA pause its rate hike cycle?

“There is certainly a risk that after a cumulative 350 basis points of rate hikes, the RBA will pause for now and wait for the quarterly price index and another labor market report.”

“Still, it could emphasize the possibility of further hikes and make them conditional on the next data releases. This would take some wind out of the market’s rate cut expectations. The Aussie would certainly benefit from such an outcome.”

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