The Reserve Bank of Australia (RBA) will announce its latest interest rate decision at 2:30 pm Sydney time (03:30 GMT, 10:30 pm New York). A crucial news conference will follow an hour later, providing important insights for traders.

The RBA is a key central bank for forex traders to watch. It was one of the first among major central banks to cut rates aggressively in response to the inflation spike, but now appears to have reached the bottom of its easing cycle. The market anticipates that the next move will be a series of rate hikes, with the timing of these increases in focus.

Current market-implied probabilities for a rate hike at upcoming RBA meetings are as follows:

– 3 February: 16% chance of a hike
– 17 March: 33% chance of a hike
– 5 May: 53% chance of a hike
– 16 June: 78% chance of a hike
– 11 August: One hike is fully priced in, with a small chance of a second
– 8 December: One hike fully priced in, with a 60% chance of a second

If the RBA and Governor Philip Lowe adopt a hawkish tone, expect these probabilities to rise, although it remains too early to anticipate any definitive short-term signals.

Original Source: Adam Button of investinglive.com