Says AUD still vulnerable to year end position unwinding
Barclays FX strategy research agrees with the consensus that the RBA will refrain from any change in policy at their interest rate decision in the new trading day.
They say:
"We do not expect any policy change from the RBA, with a cautious stance on wages likely to continue to act as a restraint. We look for the RBA to stay in a holding pattern in H1 2018, waiting for signs of a more broad-based recovery across businesses and in household incomes before firmly signaling any change in policy stance. We maintain our forecast that the RBA will raise the policy rate 25 basis points at the August 18 MPC meeting, followed by 25 basis point rate hike in November.
On the AUD front, Barclays argues that the currency is likely to remain susceptible to year-end position unwinding, with a steady decline in net positioning recorded over recent weeks (as reflected in CFTC data).
"A decrease in Australia's yield advantage of the US is also undermining the AUD."
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The RBA will announce their decision at 10:30 PM ET/0330 GMT.
