The Reserve Bank of Australia delivered a widely expected 25bp rate cut, prompting a modest AUD dip as markets viewed its lowered inflation and growth forecasts as dovish, ING’s FX analyst Francesco Pesole notes.
AUD dips on dovish growth, inflation outlook
“The Reserve Bank of Australia cut rates by 25bp as widely expected. The AUD is slightly weaker, with markets interpreting the RBA’s downward revisions to inflation and growth as a dovish signal.”
“However, Governor Michele Bullock kept forward guidance open-ended and data-dependent. Given already aggressive easing expectations, we remain constructive on AUD over the coming months.”
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