Bank of America Global Research discusses its expectations for the RBA policy trajectory in Q2.
"There is some caution over near-term prospects for the economy after recent outperformance as fiscal policy is being scaled back. Data in 2Q will be critical for the policy outlook and the reason why the Reserve Bank of Australia (RBA) is likely to remain dovish. The RBA has made it clear that policy will be reactive in this cycle, similar to the US, even if recent unemployment outcomes will likely mean an upgrade to forecasts in May," BofA notes.
"With both the RBA and Fed committing to reactive policy, their relative credibility in the face of strong data, as reflected in the real rate differential, will be crucial for AUD/USD," BofA adds.