ING analysts assess the potential impact of the upcoming RBA meeting on the Australian Dollar (AUD).
There are concerns about the RBA’s meeting on Tuesday and how it might affect the Australian Dollar. The unexpected stabilization of January’s CPI at 3.4% could prompt discussions among policymakers about potential rate cuts. However, there needs to be more certainty about whether this will occur.
Despite this, the RBA still has reasons to maintain its optimistic stance. This includes having a lower policy rate than other major central banks, recent optimistic adjustments in global rate expectations, and the ongoing possibility of inflation rebounding.
There’s optimism for a sustained rally in the AUD starting from the second quarter, with confidence that the RBA won’t hinder this trajectory.