The Melbourne cup takes place in Australia today, a world renowned horse race event. The RBA has decided to get in on todays excitement, and will be announcing their Interest Rate Decision at 15:30 AEST today.
The Commonwealth Bank of Australia has forecasted that the RBA will hike rates in November 2022. Despite this, the Reserve Bank of Australia has previously been adamant that they will not increase rates until 2024.
Australia has had below trend growth for several years, with inflation now out of the box and increasing quickly. This is not an the economic environment where official rates of 0.1% are appropriate, and pressure on the RBA is slowly mounting.
With the pressure mounting will the RBA announced that their rate forecast is flexible, spurring AUD bulls? We are of the opinion that the RBA will show flexibility in their plan today.
AUDUSD is currently trading at 0.7522.