The AUD OIS curve still includes one rate cut by year-end, ING’s FX analysts Francesco Pesole and Chris Turner note.

0.68 still looks within reach for AUD

“That is surely possible if Australian inflation eases and the Fed cuts big, but for now, the Reserve Bank of Australia is maintaining the threat of raising rates. It is one of the reasons why the Aussie dollar can perform well in the near term.”

“The RBA should have tightened policy more, and we still cannot exclude that there will be another hike if we see more acceleration in monthly CPI prints.”

“All of that means the Australian Dollar (AUD) may remain one of the market’s favourite currencies to play risk-on waves this summer, and 0.68 still looks within reach. However, the risks associated with a potential Trump re-election mean a less optimistic outlook over the medium term.”