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- AUD/USD: Aussie to outperform in the near-term unless a deeper correction in risk assets – MUFG
AUD/USD: Aussie to outperform in the near-term unless a deeper correction in risk assets – MUFG
The Reserve Bank of Australia (RBA) became the first G10 central bank to meet since conflict in Ukraine started. In the view of economists at MUFG Bank, the policy statement will keep alive expectations that the RBA is moving closer to raising rates that have been supporting the Australian dollar recently.
RBA places more focus on inflation impact from Ukraine conflict
“The RBA noted that recent geopolitical tensions were a major new source of uncertainty. The main policy focus though was on the risk they pose for faster inflation rather than any material impact on growth. They now expect a higher CPI spike due to higher petrol prices resulting from global developments.”
“While inflation has picked up, the RBA still believes it is too early to conclude it will be sustained within their target range. It is prepared to be patient before raising rates. There was no clear indication that the RBA has moved closer to raising rates.”
“The Australian rate market is more confident though that inflationary conditions will encourage the RBA to begin raising rates by the summer.”
“The aussie should continue to outperform in the near-term unless there is deeper correction in risk assets.”
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