*The RBA has continued to buck the hawkish trend of peer central banks as a small tapering of asset purchases (from AU$5bn to AU$4bn per week) was accompanied by a reiteration of the 2024 forward guidance for the first hike at the July policy meeting.
*A shift in forward guidance to 2023 looks likely before the end of the year, but markets are already pricing it in, and the AUD will likely need more hawkishness from the RBA to see some benefits.
*Despite a less attractive rate profile than its pro-cyclical peers, AUD can still rely on a lingering net-short positioning and a wider room for a hawkish re-pricing. We think this could happen if good data keep coming the RBA’s way, and the most likely profile for AUD/USD remains upward-sloping, in our view.
*A shift in forward guidance to 2023 looks likely before the end of the year, but markets are already pricing it in, and the AUD will likely need more hawkishness from the RBA to see some benefits.
*Despite a less attractive rate profile than its pro-cyclical peers, AUD can still rely on a lingering net-short positioning and a wider room for a hawkish re-pricing. We think this could happen if good data keep coming the RBA’s way, and the most likely profile for AUD/USD remains upward-sloping, in our view.