In the view of economists at Société Générale, the Australian dollar should be a winner from monetary policy normalisation. The AUD/USD pair could head towards 0.80 and beyond if inflation data supports the case for rate hikes from the Reserve Bank of Australia (RBA).

AUD has more than most to gain from a focus on inflation

“The rates market doesn’t expect a hike at the 5 April RBA meeting but does expect the first hike to come in 2Q. The 1Q CPI data release, on 27 April, will be important in that regard.”

“If it is a green light for policy tightening, it can set AUD/USD 0.80 and beyond.”