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Another rate cut by the RBA? – Westpac

FXStreet (Edinburgh) - The research team at Westpac Global Strategy Group assesses the probability of further rate cuts by the RBA in the next periods.

Key Quotes

“Market pricing of 50% chance of a cash rate cut seems likely to be reduced, benefiting AUD”.

“But this might not occur any time soon, even with Governor Stevens testifying at length on Wed with no doubt lots of questions on whether another cut might be warranted”.

“If this appearance and the minutes (Tue) do not send a clear message then the absence of data will leave markets leaning towards easing, helping cap AUD/USD in the 0.9370 area”.

“Tensions in Iraq, Ukraine etc. should maintain a background sense of unease for global equities, producing bouts of weakness on the Aussie”.

“Yet 0.9220/30 should limit losses so long as there is no major deterioration in one of the key flashpoints. This leaves us neutral AUD/USD on the week but with clear risks of any range-break lying on the downside”.

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