AUD/USD should benefit significantly if the RBA does raise rates – Commerzbank

The Reserve Bank of Australia (RBA) meets on Tuesday. Economists at Commerzbank analyze Aussie’s outlook ahead of the Interest Rate Decision.

Lower AUD/USD the RBA disappoints again

Market expectations of another rate hike are not entirely unjustified. If the RBA does raise rates, it would be a strong hawkish signal and a sign that the RBA remains committed to fighting inflation. The Aussie should benefit significantly from this.

It should be noted that the market was already pricing in another hike before the August decision, as the data was pointing in that direction. In the end, however, the RBA disappointed, which put the Aussie under considerable pressure. If the RBA disappoints again, we are likely to target lower levels in AUD/USD.