AUD to stay range-bound ahead of RBA decision
At one stage yesterday, after the disappointing retail sales data, the market was pricing in a 102% chance of a 25bps rate cut today and some analysts were even speculating that we might get a 50% cut. While it’s highly probable that we do get a 25bps rate cut, one fly in the ointment is the fact that the Australian PM called an election at the weekend. The RBA has never cut rates during an election campaign and will have to break with tradition to do so today.
(Edit: I’ve been mis-informing you so sincerest apologies. The RBA hasn’t cut rates during an election campaign but they did raise them in 2007. That negates my theory).
AUD/USD has been fairly quiet over the last two sessions and I’d expect some .8880/.8950 range trading in the run-up to the rate decision.