Bank of America Global Research discusses its expectations for next week's RBA July policy meeting.
"RBA Governor Lowe has effectively ruled out the possibility of 75bp hikes at upcoming meetings. Similar to the June meeting, the Bank would decide between 25bp and 50bp next week, depending on the economic data available at the time. Domestic data have been sufficient to support our view for a 50bp hike next week," BofA notes.
"Near-term headwinds for AUD include weak China growth and a strong USD. The lockdowns in China have led our economists to revise down growth forecasts, while the inflection of US real yields to positive levels could keep USD supported for now. This is likely to keep AUD under pressure for the next couple of months. But we expect a more constructive backdrop for AUD in 2H 2022," BofA adds.