A hawkish hike should continue to keep AUD better bid – OCBC

AUD/USD closed above the 0.65 handle for the first time in about three months. Economists at OCBC Bank analyze the pair’s outlook.

RBA likely to hike

For the RBA meeting, we see a good chance of RBA increasing cash rates by 25 bps. 

Given that market is 50-50, the chance of a two-way swing is relatively high around timing of the RBA policy announcement.

A hawkish hike should continue to keep AUD better bid while a no hike should see last week’s gains in AUD reversed.