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- AUD/USD to move downward after failure at the 0.7550 level – MUFG
AUD/USD to move downward after failure at the 0.7550 level – MUFG
The Australian dollar has weakened resulting in AUD/USD falling back below the 0.7500-level with the initial reaction to the RBA’s policy announcements. Economists at MUFG Bank expect the aussie to head lower in the near-term.
RBA drops YCC but pushes back against early rate hike expectations
“The RBA will discontinue the target for the yield on the April 2024 bond. The RBA now judges that ‘it is entirely plausible that the first increase in the cash rate will not be before the maturity of the current target bond – that is, the bond with a maturity date of April 2024. But it is now also plausible that a lift in the cash rate could be appropriate in 2023’. It signals an increased likelihood that the RBA could bring forward rate hike plans but it has not yet done so.”
“The possibility of earlier rate hikes beginning in 2023 is supported by upside risks to the RBA’s updated economic outlook.”
“Overall, we still expect the RBA to lag the Norges Bank, RBNZ, BoE, BoC and Fed in raising rates, undermining the relative appeal of the Australian dollar heading into next year.”
“After failing to break above the 200-day moving average at around 0.7550, we expect the AUD/USD to correct lower in the near-term.”
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