The RBA appears set to slightly upgrade its inflation forecasts and sound reasonably optimistic in its quarterly Statement on Monetary Policy on Friday. Governor Lowe may similarly project more optimism in his speech in Sydney on Thursday night.
The AUD has been supported recently by a rebound in commodity prices contributing to a rebound in Australiaâ€™s net export income. The currency appears relatively stable, but we see limited upside and more significant downside risks over the year ahead.
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