FXStreet reports that economists at MUFG Bank expect an extension of the RBA current dovish stance, which will not be a hurdle for AUD appreciation. 

“The RBA maintained the cash rate and three-year yield target at 0.10%. Governor Lowe stated that the RBA will review their policy stance in July. The RBA needs to decide whether to shift yield curve control to target the November 2024 maturity bond from the current April 2024 bond. At the same time, the RBA will need to lay out plans for their QE programme. We expect the RBA to announce an extension of their current dovish policy stance in July.”

“The RBA has acknowledged that the Australian economy continues to recover more strongly than expected from the COVID-19 shock. More concerning for the RBA will be below target inflation. The lack of underlying inflation pressure will again encourage the RBA to maintain looser policy for longer.” 

“The RBA remains committed to plans not to begin rate hikes until 2024 at the earliest. The RBA’s continued dovish policy stance is set to remain a dampener on further AUD upside as they lean against improving fundamentals. We continue to believe though that it will not prevent further AUD gains from higher commodity prices and improving global investor risk sentiment. We still expect AUD/USD to rise above the 0.8000-level.”