AUD: Carry support and energy link – OCBC

💡 DMK Insight

The RBA’s recent rate hike to 4.35% is a game changer for the Aussie dollar. With this increase, traders should be paying close attention to the potential for further appreciation in the AUD, especially against major pairs like the USD. The RBA’s balanced guidance suggests they may not be done tightening, which could keep upward pressure on the AUD in the near term. This is particularly relevant as global markets are still digesting the implications of the Fed’s monetary policy, creating a ripe environment for currency volatility. However, there’s a flip side: if inflation data or economic indicators from Australia start to show weakness, the RBA might pivot quickly, leading to a sharp reversal. For now, keep an eye on the 0.6500 level against the USD as a key support point; a break below could signal a shift in sentiment. Watch for upcoming economic releases that could impact the RBA’s stance, as these will be crucial for positioning in the AUD.