Australian CBank to raise rates again

Futures market pricing indicates a 71 per cent chance that the RBA will increase the official cash rate by 25 basis points to 4 per cent when the board meets in Sydney today, for the first time this year.

Ahead of the meeting, the Australian dollar fell US1c to US88.33c while the sharemarket extended January’s 6.2 per cent loss into the new month with a 1 per cent, or 45.5 point, fall in the S&P/ASX 200 index.

ICAP senior economist Adam Carr said the financial markets judged that there was a small chance — 30 per cent — that the central bank will choose to keep interest rates on hold, and this was a reasonable assessment.

The Australian

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza