Prospect of Rate Rises Could Support Australian Dollar
Dow Jones
Sep 28
1250 GMT - The Australian dollar should rise if the Reserve Bank of Australia raises interest rates by 25 basis points to 4.60% on Tuesday as expected and signals further hikes, ING's Francesco Pesole says in a note. Inflation concerns remain elevated, and even if crude prices decline, domestic fuel prices are set to remain sticky for some time, he says. Core inflation measures are high, the labor market is tight and growth has proven stronger than expected, he says. "We therefore expect markets to retain expectations for further tightening after the meeting, offering support to AUD." The Australian dollar trades steady at $0.7022 and ING expects it to reach $0.72 by year-end.
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