RBA expected to lower rates to 2.0% - Scotiabank

FXStreet (Edinburgh) - Camilla Sutton, Chief FX Strategist at Scotiabank, believes the RBA could cut its repo rate by 25 bp to 2.0% in tomorrow’s meeting.

Key Quotes

“AUD is flat from Friday’s close, trading comfortably between the 50‐day and 100‐day moving averages (0.7745 and 0.7870, respectively)”.

“The near‐term risk is a test down to the 50‐day as the we enter the RBA interest rate decision”.

“Inflation and employment were stronger than expected and iron ore prices have climbed off their lows; however most metrics are still low, the data is uneven and AUD has rallied over 3% since its April lows”.

“The economic backdrop combined with the RBA’s easing bias is likely to see another 0.25% rate cut this week, bringing rates to 2.0%”.