AUD/USD: Unlikely to benefit much more from a restrictive RBA in May – Commerzbank
The Reserve Bank of Australia (RBA) is getting closer to exiting expansionary monetary policy. However, the aussie is unlikely to take advantage of it as the market has already priced in a reasonably tight rate cycle, economists at Commerzbank report.
Risk of weaker growth in China to further dampen AUD’s appreciation potential
“For the three months horizon the market expects a key rate of 0.75% – i.e. a rate step at each meeting including July. Over the coming year, the market expects the key rate to rise to 2.50%.”
“As the market has already priced in a reasonably tight rate cycle AUD is unlikely to be able to benefit much more from a restrictive RBA in May.”
“The risk of weaker growth in China due to continued lockdowns is likely to further dampen the AUD’s appreciation potential.”
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FXStreet Insights Team
FXStreet
The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.
