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2 Feb 2015
A dovish RBA should keep AUD pressured - RBS
FXStreet (Bali) - A likely dovish statement by the RBA this week, without ruling out a rate cut, should keep the downward pressure on the AUD, notes the FX Strategy Team at RBS.
Key Quotes
"The RBA meets this week and after the BoC and RBNZ took steps in the dovish direction, the expectation that the RBA follows suit with either a very clear signal of an easing bias or an outright cut have increased. This week’s meeting will be followed by a release of the RBA’s Statement on Monetary Policy (SoMP), including new forecasts."
"While we think a more clearly dovish stance is very likely, it may be attractive for the RBA to cut rates alongside its new forecasts."
"After the BoC’s surprise decision to cut rates, it is hard to rule out a surprise rate cut despite previous signalling language suggesting a period of stability is the most likely course."
"The trend in commodity prices and the stronger USD, paired with a likely dovish statement by the RBA this week, could keep the downward pressure on the AUD."
Key Quotes
"The RBA meets this week and after the BoC and RBNZ took steps in the dovish direction, the expectation that the RBA follows suit with either a very clear signal of an easing bias or an outright cut have increased. This week’s meeting will be followed by a release of the RBA’s Statement on Monetary Policy (SoMP), including new forecasts."
"While we think a more clearly dovish stance is very likely, it may be attractive for the RBA to cut rates alongside its new forecasts."
"After the BoC’s surprise decision to cut rates, it is hard to rule out a surprise rate cut despite previous signalling language suggesting a period of stability is the most likely course."
"The trend in commodity prices and the stronger USD, paired with a likely dovish statement by the RBA this week, could keep the downward pressure on the AUD."