RBA Rate Decision to Spark Volatile Trading Conditions for the Australian Dollar?
Today, the Reserve Bank of Australia (RBA) will conclude its May policy meeting.
Analysts are currently split on whether the bank will raise rates, so the decision could infuse some significant volatility into the Australian Dollar.
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What is the RBA Expected to do?
The #RBA opted to keep interest rates on hold in April. Ending a record run of hikes and leaving the cash rate at 3.6%. But the minutes from the meeting reveal the decision was a line ball call.
Economists at the Commonweath Bank of #Australia see May’s decision also coming down to the wire, but narrowly favour the RBA raising the cash rate one final time by 25bps to a peak of 3.85%.
Investors are less confident however, particularly in the wake of the slowdown in Australia’s first quarter #inflation print.
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What Does This Mean for AUD?
This uncertainty means the Australian Dollar could see some erratic movement following the decision
As markets appear sceptical that the RBA will raise rates in May, a 25bps increase could propel the #Australian #Dollar higher.
On the other hand, a decision to leave rates on hold again is likely to cement the view that the RBA’s hiking cycle is over and pull the ‘Aussie’ lower.
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If you have a #currency transfer coming up and would like to talk through your options, we’re on hand to help.?Have you considered:
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With a forward contract you can secure the current rate for a future requirement, offering protection against adverse #rate movements.
If you don’t need to make a transfer right now but you’re worried the exchange rate will weaken you can buy currency today and store in your #currency wallet for use in the future.
With volatility comes opportunity, and the potential to maximise on sudden rate appreciation. Contact your Account Manager to set your target rate.
With our rate alert service just tell us your target rate and we’ll let you know by text and email if that rate is achieved.?
If you’d like to have a chat about an upcoming currency transfer or the services we offer, please get in touch on the details below.
Please do not hesitate to contact me if you need any further assistance or require a live dealing quote.?
Outback Marine provides system design, manufacturing and product solutions for marine, mobile and off grid applications.
1 年At its meeting today, the Board decided to increase the cash rate target by 25?basis points to 3.85?per?cent. It also increased the rate paid on Exchange Settlement balances by 25?basis points to 3.75?per?cent.