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RBA expected to hold rates at 4.35% amid inflation and growth risks

BNY analysts cite structural drags like weak housing, limited terms-of-trade support, and poor productivity as reasons for a cautious policy hold.

Reported · Written up by our desk · Central Banks

BNY’s Geoff Yu and David Tam expect Australia’s Reserve Bank to keep its policy rate unchanged at 4.35%, saying markets are skeptical about the RBA’s willingness to hike despite ongoing inflation pressures.

They point to a mix of data and structural factors, arguing that robust labor and spending have not been enough to offset concerns including weaker housing conditions, limited support from the terms of trade, and sluggish productivity.

The analysts say a steady policy stance fits a “do no harm” approach, given the risks they see to the economy and the need to avoid unintended effects.

Separate from the RBA call, FXStreet’s trading commentary notes the broader context for the week includes currency moves driven by shifting US dollar sentiment and geopolitical jitters, with attention on pairs such as AUD/USD and others.

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