The market isn’t pricing in any high probabilityof rate hikes this year. The last statement was a little more dovish than usual yet Governor Stevens came out last week and said that interest rates will need to rise at some stage. Personally I think there’s little chance of seeing any policy change in the next three months.

Dealers seem to be of the opinion that the greater risk today is of less hawkish meeting minutes which could put the AUD under some short term bearish pressure. Even if that does happen, we can expect to see lots of demand on dips from Asian, South American, and Eastern European central banks.