AUD/USD Remains Steady Around 0.7850 as RBA Decision Looms

Australia’s dollar held its longest losing streak in a month as investors bet the central bank will decide to cut interest rates that are already at a record low.

Swaps markets give better than 70 percent odds the Sydney-based Reserve Bank of Australia will lower the cash rate target on Tuesday to 2 percent from 2.25 percent, according to data compiled by Bloomberg. Twenty-five of 29 economists surveyed by Bloomberg also predicted a quarter-point reduction. Traders will be hoping they get lucky this time after betting on rate cuts at each of the previous two policy meetings.

“Our call is for a cut,” said Robert Rennie, global head of currency and commodity strategy in Sydney at Westpac Banking Corp., adding that such a decision may drive the Aussie down more than 2 percent to 76.50 U.S. cents. “The sense is the RBA will need to further downward revise its growth forecasts for next year.”

Bloomberg

Stuart McPhee
Stuart McPhee
Australian private trader for nearly 20 years, author, trading coach, licensed adviser and regular speaker at major trading events all around the world. Graduate of RMC Duntroon and former Australian Army Officer.