State Street’s APAC head of macro strategy Evans said the Reserve Bank of
Australia (RBA) raised the cash rate 25bps to 4.85% in a 6-3 vote but retained a
dovish tint. The RBA’s emphasis on slowing output signals concern about a
weakening real economy that could help cool inflation and lower odds of further
tightening. Evans said real-money investors have begun trimming previously
extreme AUD overweights. Any renewed uncertainty about the future rate path
could add downside pressure to the currency.
