The RBA’s decision to walk back its hawkish shift points to credibility issues ahead: economists at Credit Suisse now drop their bullish AUD bias and target AUD/USD 0.6400 by end Q1.

AUD: Are you GBP in disguise?

“The RBA’s decision to walk back its hawkish shift in its 7 Mar decision amid domestic political pressures points to renewed credibility issues, and casts AUD as the new GBP.”

“We think now markets will be more reluctant to price in a more hawkish outlook, even if data warrant it.”

“With the RBA view now fundamentally challenged, and against the backdrop of rising Fed tightening pressures, we now forgo our bullish AUD stance, and we see downside risks in AUD/USD as likely to extend as far as 0.6400 between now and quarter-end.”