AUD
Policy rates rose for two months consecutively in February and March. But markets now price the next move in rates as down and this represents a significant danger for the AUD as it is starting from high levels supported primarily by attractive rate differentials.
Immediate rate cut risks shouldn’t be exaggerated. The RBA’s latest monetary policy statement was certainly more dovish, but that only made it broadly neutral as the previous stance had been clearly hawkish. There are, as the RBA said, some tentative signs of weakness in the Australian economy, with business and consumer sentiment both weakening and credit growth [...]
