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Investors Betting on an RBA Rate Cut in August

Posted by WorldWideMarkets . on Jul 19, 2013 3:21:00 AM

Rate futures pricing in a 60 percent probability of the Reserve Bank of Australia cutting the benchmark rate to 2.5 percent from the current 2.75 percent at the next meeting on August 6. The weakening aussie may do the RBA’s work for it but few are willing to stand in the way of the Australian central bank. Expect only further aussie weakness if the RBA does act. If it fails to act at this meeting, investors will immediately begin betting that they will have to act at the meeting after so even if the aussie holds on the day, it will continue to sell off. Speculators have now been short the aussie dollar against the U.S. dollar since mid May.aussie trading

 

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