AUD/USD: China's gloomy outlook will keep the Aussie in the 0.72-0.73 range — ING

The Reserve Bank of Australia's (RBA) shock hike to a 25 basis point (bps) rate has steered Australia to bigger levels. Moreover, by considering the opinions of ING economists, the AUD/USD pair's upward movements are limited despite

May 04, 2022 - 03:16 PM 262 views

AUD/USD: China's gloomy outlook will keep the Aussie in the 0.72-0.73 range — ING

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© AUD/USD: China's gloomy outlook will keep the Aussie in the 0.72-0.73 range — ING

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The Reserve Bank of Australia's (RBA) shock hike to a 25 basis point (bps) rate has steered Australia to bigger levels. Moreover, by considering the opinions of ING economists, the AUD/USD pair's upward movements are limited despite the RBA’s hawkish raise.

Markets now expect 270 basis points of tightening by the close of the year.

Whereas the RBA has given some indications that it is now dedicated to a period of raising interest rates to combat inflation, the markets are currently trading at 270 basis points (bps) of tightening by the close of the year, which may be too aggressive.

For the time being, we believe that the AUD/USD will remain capped in the 0.72-0.73 range in the following weeks due to the external environment that is still adversely impacted by China's clouded outlook.

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