AUD: RBA set to cut 25bp early Tuesday – ING

FXStreetMay 19, 2025 9:56 AM

The Reserve Bank of Australia is widely expected to cut rates tomorrow morning (06.30 CET), ING's FX analyst Francesco Pesole notes.

Room for AUD/USD upside

"Markets had previously speculated on a 50bp move, but the US-China deal and a slower inflation decline compared to expectations have cemented the 25bp call. We believe the RBA will retain a good deal of caution on forward guidance, but should sound a bit more dovish, implicitly endorsing market expectations for two additional cuts in 2025 after this one."

"We still see room for AUD/USD upside on the back of domestic US negatives and improved risk sentiment. We target a return to 0.650, and don't think this RBA cut will get in the way."

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