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Rabobank expects another RBA rate hike as AUD/USD struggles

Rabobank cited weaker Chinese demand for Australian commodities and a softer domestic backdrop as headwinds for the Australian dollar.

Reported · Written up by our desk · Major Pairs

FXStreet reports that Rabobank’s Senior FX Strategist Jane Foley said AUD/USD is on the back foot, with the Australian dollar the weakest G10 currency on a one day view.

Foley maintained Rabobank expects one more RBA rate hike this year, even as market pricing has cooled, with FX Street noting policy expectations are priced for just 12 bps of rate hikes on a three month view.

The strategist pointed to headwinds including weaker Chinese demand for Australian commodities, energy related trade shocks, and a softer domestic economic climate that could continue to weigh on the currency.

Rabobank also noted that Australia’s current account has swung into deficit given the country’s large net foreign liability position, which it said can increase vulnerability during periods of broad market uncertainty.

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