OCBC’s FX strategists Sim Moh Siong and Christopher Wong note that hawkish comments from RBA Deputy Governor Hauser have supported the Australian Dollar, even as lower Australian bond yields show rates markets remain cautious. The bank has extended its bullish view, lifting its end-2026 AUD/USD forecast to 0.73 from 0.69, while highlighting a disconnect between FX strength and muted OIS pricing for further RBA hikes.

RBA rhetoric versus cautious rates pricing

"Hawkish comments from RBA Deputy Governor Hauser supported the AUD overnight."

"Hauser warned that inflation remains “too high” and that the Board cannot allow it to persist much longer."

"We have extended our bullish AUD view, now forecasting AUDUSD at 0.73 by end-2026 (previously 0.69)."

"However, the muted reaction in the OIS market—still pricing roughly 20bp of cumulative hikes by May and about 36bp by year-end—suggests bond investors remain unconvinced that the RBA’s hawkish tone will translate into a sustained policy shift."

"Lower Australian bond yields reinforce this disconnect between FX and rates markets."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)