MUFG Research discusses AUD outlook after this week's RBA Policy decision to raise rates by 25bps.
"At today’s policy meeting, the RBA raised rates by a further 25bps taking the policy rate to 3.10% in line with expectations. The accompanying policy statement has been closely scrutinized to assess the RBA’s plans for rate hikes at the start of next year. The overall tone of the updated guidance is less hawkish as the RBA emphasizes that while it expects to raise rates further, “it is not on a pre-set course”," MUFG notes.
"We expect the sharp global slowdown and easing inflation pressures will result in a lower peak and weigh on the Aussie at the start of next year before the re-opening of China’s economy provides more support for it to stage a sustained rebound as next year progresses," MUFG adds.
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