RBA kept policy rates unchanged, but left the door open for further rates cuts
RBA kept its policy rates unchanged, as widely expected. However, the statement noted that the inflation outlook may provide some scope for further easing, should that be required to support demand and this dovish tone saw AUDUSD dipped slightly post-RBA. This is pretty much in line with our Australia economists’ view of a 25bp rate cut at the next meeting in August. Nevertheless, with the OIS market already pricing in 30bp of further easing over the next 12 months, we view that AUD dips should be limited.
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BNP Paribas