With the Australian dollar trading around the Reserve Bank of Australia’s (RBA) preferred level of $0.75, will the central bank hold off on cutting rates at Tuesday’s meeting?
According to Mitul Kotecha, head of FX strategy, Asia-Pacific at Barclays, the RBA is likely to pull the rate cut trigger sooner rather than later given the recent collapse in iron ore prices – a key export for Australia.
“It’s interesting, the RBA had said they were comfortable with the Aussie dollar at $0.75, but the reality [is] now commodity prices, [such as] iron ore, have fallen even further. They probably want to see[the Australian dollar] even lower now,” Kotecha told CNBC.
