Soft easing bias to keep AUD on the backfoot – Westpac

FXStreet (Mumbai) - Sean Callow, FX Strategist at Westpac, feels the RBA is likely to hold fire in June as well as July and that the tone of the policy statement, which could carry an easing bias, will be watched closely by the markets.

Key Quotes

“There remains no tension over the RBA’s decision on the cash rate on Tue, with neither June nor July seen as “live” for a change in rates. But the tone of the statement will be watched closely.”

“The RBA is hardly likely to swing from the overall cautiously upbeat tone of May to deep pessimism 4 weeks later, but it might clarify at least a ‘soft’ easing bias. This should keep AUD on the back foot.”

“Pricing for another RBA rate cut might not extend much further than the 80% chance already priced by December.”