Countdown to RBA rate decision
Countdown to RBA rate decision
The nine members of the Reserve Bank of Australia (RBA) are set announce its latest interest rate decision that could significantly impact the Australian dollar.
This comes amidst remarks from Warren Hogan, Chief Economic Advisor at Judo Bank, who suggests that the central bank might soon need to raise rates to over 5%, a notable increase from the current 4.35%. Hogan asserts, "We're nearing two years since the commencement of rate hikes, and it appears that it's not yielding the desired outcomes."
The money market indicates only a small probability of a rate hike today. However, Economic Editor John Kehoe from the Australian Financial Review raises doubts about whether the market is downplaying the likelihood of such an increase. According to Kehoe, over the last 25 years, the RBA has consistently raised interest rates promptly when confronted with a quarterly inflation rate as high as the current one, barring exceptional economic conditions.
In contrast, Gareth Aird, Head of Australian Economics at CommBank, posits that Australia's neutral cash rate likely lies between 2.5% to 3%, and any rate exceeding 3% is sufficiently constraining.
On the daily chart, the price has once more approached a significant resistance zone at 0.6650, where the pair encountered rejection in both April and March.
Should the Reserve Bank of Australia adopt a more hawkish stance today, even in the absence of a rate hike, it might catalyze a breakthrough of this resistance level for the pair. Conversely, a downward move could find support around the 100-day moving average.
The nine members of the Reserve Bank of Australia (RBA) are set announce its latest interest rate decision that could significantly impact the Australian dollar.
This comes amidst remarks from Warren Hogan, Chief Economic Advisor at Judo Bank, who suggests that the central bank might soon need to raise rates to over 5%, a notable increase from the current 4.35%. Hogan asserts, "We're nearing two years since the commencement of rate hikes, and it appears that it's not yielding the desired outcomes."
The money market indicates only a small probability of a rate hike today. However, Economic Editor John Kehoe from the Australian Financial Review raises doubts about whether the market is downplaying the likelihood of such an increase. According to Kehoe, over the last 25 years, the RBA has consistently raised interest rates promptly when confronted with a quarterly inflation rate as high as the current one, barring exceptional economic conditions.
In contrast, Gareth Aird, Head of Australian Economics at CommBank, posits that Australia's neutral cash rate likely lies between 2.5% to 3%, and any rate exceeding 3% is sufficiently constraining.
On the daily chart, the price has once more approached a significant resistance zone at 0.6650, where the pair encountered rejection in both April and March.
Should the Reserve Bank of Australia adopt a more hawkish stance today, even in the absence of a rate hike, it might catalyze a breakthrough of this resistance level for the pair. Conversely, a downward move could find support around the 100-day moving average.
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Free TradingView Essential with BlackBull Markets: www.blackbull.com/en/platforms/tradingview/?utm_source=tradingview