RBA Interest Rate Decision Looms: Hold or Hike?
London: 17 June 2024 (TraderMade): The Australian dollar (AUD) is treading water today, with all eyes glued to tomorrow's Reserve Bank of Australia (RBA) policy meeting. The question is whether the central bank will maintain its current rate or trigger another hike to combat inflation.
Inflation Heats, Rate Rise on the Horizon?
Australia's inflation rate has steadily climbed, reaching a multi-year high of 5.1% in March 2024. This scenario has put immense pressure on the RBA to take action and curb rising prices.
The AUDUSD pair declined 0.178% to 0.66039 since Friday's Close.
Most analysts predict the RBA will raise the interest (Cash rate by 25 basis points (bps) to 4.6%, marking the fourth consecutive rate hike this year. However, some experts believe the bank may hold steady, citing concerns about slowing economic growth.
Market on Edge, Waiting for RBA's Signal
The outcome of the RBA meeting will significantly impact the Australian economy and the AUD. A rate hike could strengthen the currency as it becomes more attractive to hold. However, it could also put further strain on borrowers.
Conversely, a decision to hold rates could weaken the AUD but provide some relief to mortgage holders. Market participants anxiously await the RBA's announcement tomorrow, with the potential for volatility in both the currency and stock markets depending on the central bank's decision.
