The Reserve Bank of Australia (RBA) today released the minutes of its April monetary policy meeting, which showed that members of the financial institution agreed that the May meeting would be a good opportunity to reconsider the current economic backdrop and possibly adjust interest rates.
Policymakers highlighted rising global risks from the US tariff changes and stressed the importance of not undermining progress on inflation by acting too early. The RBA said the labour market was not as tight as previously thought and wage growth could continue to slow. In theory, the RBA is waiting for an accurate assessment of whether monetary easing in Australia is warranted in the near term.
However, the OIS model has more than priced in a 25 basis point cut in Australia at its next meeting on 20 May. What’s more, the market is giving 33.6% for a 50 basis point move. Source: Bloomberg Financial LP
The AUDUSD has negated the downside triggered by global tariff changes and is currently trading near the 200-day EMA zone, which from a technical perspective is an indication of the overall long-term trend in the pair. The Australian dollar is currently the best performing currency in the FX market when it comes to G10 countries. Source: xStation
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