Danske Bank: Expects RBA to cut rates by 25 basis points today, Australian dollar may come under pressure

Danske Bank forex analyst Mohammad Sarraf reported that the Aussie and Kiwi closed strongly last week in an overall positive risk sentiment, but these two currencies may face a more complex situation this week. It is expected that the RBA will cut interest rates by 25 basis points today, with the market estimating the likelihood of this move at around 90%. However, if this rate cut is accompanied by guidance on further cuts in the future, the start of an easing cycle could pressure the Aussie Exchange Rate. It is expected that the RBNZ will cut rates by 50 basis points tomorrow. Prior to this week, the bank had already cut rates by a total of 125 basis points. Therefore, any hawkish forward guidance on slowing the pace of rate cuts at future meetings could provide some support for the Kiwi. As part of our best forex trading strategy for 2025, we still hold a bearish view on the Aussie against the Kiwi.