AUD: Anticipated RBA hike looms – BNY
Bob Savage, Head of Markets Macro Strategy at BNY, notes the Australian Dollar's potential as the Reserve Bank of Australia (RBA) is expected to hike rates this week due to rising inflation.

Bob Savage, Head of Markets Macro Strategy at BNY, notes the Australian Dollar's potential as the Reserve Bank of Australia (RBA) is expected to hike rates this week due to rising inflation. This shift marks a significant turnaround for a G10 economy transitioning from an easing cycle to tightening. The report emphasizes the RBA's hawkish stance compared to other central banks and notes the impact on AUD trading dynamics.

RBA hike expected amid inflation concerns

"There is a strong case for an RBA hike this week, as inflation has decidedly taken a higher turn. Such a step would mark one of the fastest turnarounds for a G10 economy shifting from an easing cycle back toward hikes."

"Any marked improvement on the AUDUSD leg will be highly sensitive to any shift in relative pricing between the two central banks and change aggregate flow dynamics."

"AUD was net-bought on the crosses, which comes as no surprise given that the RBA’s hawkish pricing and the global metals complex meant AUD was highly favored on a relative value basis."

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

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