RBA
Australia and New Zealand Banking Group (ANZ) has indicated that it expects the Reserve Bank of Australia (RBA) to raise interest rates by 25 basis points at its next policy meeting on Tuesday. ANZ also sees room for a rally in the Australian dollar (AUD), especially against the New Zealand dollar (NZD) following the RBA decision.
the main points:
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Expect a price hike: Despite recent weaker-than-expected CPI data in Australia, the ANZ expects a 25 basis point hike in interest rates from the Reserve Bank of Australia at its meeting next week. The bank notes that the decision will be “finely balanced”.
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Potential appreciation of the Australian dollar: ANZ highlights that recent RBA decisions have not led to a significant improvement in the Australian dollar, and in some cases have led to a bearish trend. However, an upbeat result from the Reserve Bank of Australia this time could lead to a recovery in the Australian dollar. This is more likely to be expressed against other G10 currencies than against the US dollar.
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The strength of the Australian dollar against the New Zealand dollar: ANZ predicts that the New Zealand dollar could fall further, especially compared to the Australian dollar if the RBA continues to raise interest rates.
summary:
ANZ expects the RBA to raise interest rates by 25 basis points at the next policy meeting, despite the recent weak CPI data. The bank believes that this decision could provide an impetus for the Australian dollar to rise, especially against the New Zealand dollar. The potential appreciation of the Australian dollar is expected to be more pronounced against the G10 currencies than against the US dollar. The New Zealand dollar is expected to face downward pressure, especially when compared to the Australian dollar after the RBA decision.
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