Aussie Dollar Rises, Will the RBA Raise Interest Rates Again?
The Australian dollar (AUD) strengthened against the US dollar on Friday, extending its uptrend to six consecutive days. This strengthening occurred not only against the USD, but also against a number of other major currencies. The trigger was higher-than-expected Australian inflation data, with consumer prices rising for the fourth consecutive month in October and now above the RBA's 2%–3% target. This condition has caused the market to begin to doubt the possibility of policy easing and instead see the risk of further interest rate hikes from the Reserve Bank of Australia (RBA).
Nevertheless, for its December meeting, the RBA is still expected to hold the Official Cash Rate (OCR) at 3.6%, as inflation is high but the labor market is considered relatively healthy despite a slight increase in unemployment. Private Sector Credit Data released Friday showed loans grew 0.7% month-on-month in October, above expectations of 0.6%, with annual growth edging up to 7.3%. Meanwhile, the 30-day ASX interest rate futures contract reflects only about a 6% chance of a December rate cut, indicating the market is still leaning towards a scenario of prolonged high interest rates, which would ultimately be a boost to the AUD's strength. (az)
Source: Newsmaker.id
