Australian Dollar: RBA policy path caps upside against US Dollar – Societe Generale
Societe Generale’s Kenneth Broux highlights ongoing pressure on the Australian Dollar after the RBA removed one projected rate hike, keeping the cash rate at 4.35% and projecting the policy rate around 4.40% through 2028.
Societe Generale's Kenneth Broux notes the ongoing pressure on the Australian Dollar following the RBA's decision to remove a projected rate hike, maintaining the cash rate at 4.35% with a projected policy rate close to 4.40% through 2028. This updated stance, combined with lower inflation forecasts, dampens volatility in AUD/USD.
Technical analysts watch support zones around 0.6980 and resistance levels at 0.7120 and 0.7200/0.7275. The RBA's decision has led to more disappointment for the Australian currency in the coming weeks. Instead of peaking at 4.7% by June 2028, the policy rate is now expected to remain steady at 4.4% throughout 2028 but with a slight upside potential of 10 basis points in 2027.
This policy freeze until mid-2028 reduces implied AUD/USD volatility, potentially offering support to the dollar and yen (bond vigilantes, carry). The 10-year ACGB yield remains high near 5.0%, mirroring the upward trend in developed market yields with resistance at 5.10%.
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