Analysts forecast the Reserve Bank of Australia’s next move will be a rate cut amid cooling inflation and economic uncertainty.
The Australian Dollar fell 0.25% to 0.7010 USD in European trading as markets priced in a potential Reserve Bank of Australia rate cut. The shift follows signals from major banks that further hikes are unlikely, with selling pressure weighing on the currency.
The RBA has raised its Official Cash Rate by 75 basis points this year to 4.35%, but recent data shows April’s Consumer Price Index at 4.2%, easing inflation concerns. Analysts at National Australia Bank expect the next move to be a cut, though timing remains uncertain due to economic volatility.
Commonwealth Bank economists project rates will hold at 4.35% until May 2027 before cuts begin, reinforcing expectations of a dovish pivot.