Sean Callow, FX Strategist at Westpac, expects the RBA to remain in “watch and wait” mode, adding that AUD might press a little higher on the anticipated balanced statement.
There is always interest in the RBA policy statement (2:30pm Syd/11:30am Sing/HK) but little tension over its decision on the cash rate, with markets pricing a 95% chance of it remaining at 2.0% where it has been since May 2015.
The RBA should remain in “watch and wait” mode, repeating that “continued low inflation may provide scope for easier policy, should that be appropriate to lend support to demand”, reserving judgement on the demand outlook for now.
On AUD, we expect similar commentary to Feb: “The exchange rate has continued its adjustment to the evolving economic outlook.”
This would confirm that Stevens has not changed his view on AUD since his parliamentary testimony on 12 Feb and provide some contrast to the Edwards WSJ interview on 19 Feb. AUD might press a little higher on such a statement.
(Market News Provided by FXstreet)