Citi discusses its expectations for next week's RBA policy meeting.
"CitiFX Strategy expects AUD (along with NZD) should remain under pressure as the USD squeeze and risk off backdrop continues. Monetary policy also remains in focus with expectations for the RBA to cut to 10bps at their next meeting on October 6," Citi notes.
"Citi Economics does not believe they will cut, though. Our view is that even if they do cut, the impact on FX should be marginal as the actual overnight cash rate is already realizing around 13bps and market pricing is for marginally deeper cuts beyond 10bps. Therefore, an actual cut to 10bps is more than priced in and should have limited impact," Citi adds.