Credit Agricole CIB Research discusses a key development for AUD as both the CBA (Australia’s largest mortgage lender ) and ANZ raised their variable mortgage rates 15bp and 16bp, respectively, which is 1-2bp more than Westpac raised its rate by last week.
" The AUD weakened on the back of the news, but we note two factors that suggest the AUD’s decline on the back of this news should not be as large as it was last week when Westpac raised its rates.
First, this news is no longer a shock. While there was debate amongst analysts about whether other banks would follow Westpac, the consensus was that they eventually would – and they have. Second, the RBA just this week shrugged off the Westpac mortgage rate rise by citing that average mortgage rate paid is still lower than a year ago," CACIB argues.