Australian Dollar: RBA faces rates squeeze – Rabobank

RaboResearch Global Economics & Markets notes the Reserve Bank of Australia (RBA) must decide on policy with strong construction growth and historical parallels to past Oil shocks and inflation spikes. Citing Australian Financial Review, the bank points to building approvals near record GDP shares and expects a 25 basis point hike, taking the official cash rate to 4.60%, which would support the Australian Dollar.

RBA seen hiking as construction booms

"The RBA has to grapple with that all, even if overlooking most of it, as soon as tomorrow."

"That’s as the Australian Financial Review notes the Bank faces a rates squeeze’ as construction grows at its fastest pace in 60 years – for data centres more than housing."

"Our Ben Picton sees a 25bps hike to take the OCR to 4.60%."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)