A weak observation in the Reserve Bank of Australia's monetary p
The Australian dollar fell toward $0.615 after the Reserve Bank of Australia said in its latest policy meeting minutes the decision to raise interest rates by 25 basis points in June was “finely balanced,” easing expectations of further tightening in the coming months.
Still, the board said they will do what is needed to bring inflation back to the 2%-3% target band over a reasonable timeframe, acknowledging upside risks to inflation.
The RBA has now lifted the cash rate by a total of 400 basis points since May 2022, bringing borrowing costs to an 11-year high of 4.1%.
Still, the board said they will do what is needed to bring inflation back to the 2%-3% target band over a reasonable timeframe, acknowledging upside risks to inflation.
The RBA has now lifted the cash rate by a total of 400 basis points since May 2022, bringing borrowing costs to an 11-year high of 4.1%.
Trade closed: target reached
There is a significant possibility that the BoE might disappoint
Market participants anticipate that the Monetary Policy Committee (MPC) will raise rates in each of the next five policy meetings until the end of 2023, taking the bank rate to 5.75%, which would be the highest in the developed world. However, the BoE may not meet these exceedingly hawkish market expectations in its policy decision scheduled for Thursday. There is a significant possibility that the BoE might disappoint, leading to investors cashing in on their long GBP positions.
Given the GBP's recent strong performance, any indication that the BoE is not as hawkish as expected could cause a reversal in the currency's gains.
Investors and market participants will closely watch for any hints or changes in the BoE's language that could suggest a more cautious approach to rate hikes. Such a development could impact currency markets and bring a fresh perspective to the GBP's trajectory.