Bank of America Global Research discusses its expectations for tonight's RBA policy meeting. BofA's AUD/USD year-end forecast of 0.78 currently to reflect the likelihood of both RBA and Fed signaling reduced policy accommodation by end 2021.
"The RBA will likely upgrade forecasts for the third time due to strong economic momentum while maintaining flexibility on policy adjustments. Yet, the Bank this week should reinforce their dovish guidance on interest rates and retain optionality on both rolling the 3yr yield target and extending the QE program later this year, we believe," BofA notes.
"Little evolution to RBA language around the Term Funding Facility leaves it on track for a June 2021 ending," BofA adds.