AUD likely to struggle right up to the RBA meeting - Westpac

Sean Callow, Research Analyst at Westpac, suggests that the AUD was blindsided by the CPI shocker and is likely to struggle right up to the RBA meeting, with economists and markets deeply divided.

Key Quotes

“The growth outlook argues for no change (including perhaps a growth-supportive budget) but core inflation of 1.5% y/y is hard to ignore. Commodities remain broadly supportive for AUD and the FOMC statement and US GDP shouldn’t help USD, so dips towards 0.7500 should find buyers, so long as the RBA does in fact hold steady as our economics team expects. A steady hand should open up a run at 0.7750 but not much further, given inflation will leave the door wide open for RBA easing beyond May.”