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Australian Dollar Hits 7-Week High as Rate Cut Expectations Grow
Solid ECN – The value of the Australian dollar has risen above $0.66, marking its highest level in more than seven weeks. This increase is primarily due to the belief that the US Federal Reserve might lower interest rates before other leading global banks. During his US Senate testimony, Fed Chair Powell hinted that the Fed might ease its tight monetary policy sooner if inflation decreases. On the home front, recent figures revealed that Australia's economic growth in the last quarter was less than anticipated.
This has led to increased speculation that the Reserve Bank of Australia (RBA) might begin to cut rates this year. Market predictions suggest an almost 90% likelihood of the RBA reducing its cash rate by August, with expectations of a total ease of 45 basis points throughout the year. Following the disappointing GDP figures, the Commonwealth Bank of Australia has maintained its prediction of 75 basis points in rate cuts for the year.
This has led to increased speculation that the Reserve Bank of Australia (RBA) might begin to cut rates this year. Market predictions suggest an almost 90% likelihood of the RBA reducing its cash rate by August, with expectations of a total ease of 45 basis points throughout the year. Following the disappointing GDP figures, the Commonwealth Bank of Australia has maintained its prediction of 75 basis points in rate cuts for the year.