At 9:20 AM Sydney time, Deputy Governor Andrew Hauser will join a fireside chat at the Barrenjoey Economic Forum in Sydney. This talk may shed light on a possible interest rate cut by the Reserve Bank of Australia (RBA). The anticipation for an interest rate change has grown stronger after the recent Consumer Price Index (CPI) data release. This information suggests that an adjustment may take place in August.

Watching For Signals

We are eager to hear any signals from RBA Deputy Governor Andrew Hauser during his discussion today. The market is now nearly certain that an interest rate cut will happen in August. This belief was reinforced by yesterday’s important inflation report. The CPI data for the second quarter of 2025, released on July 29th, showed that inflation has dropped to 2.8%, finally fitting within the RBA’s target band of 2-3%. This is a significant decrease from the high inflation rates seen in much of 2024. The market saw this as a green light for the RBA to start easing policies. As a result, interest rate derivatives have adjusted quickly. Overnight index swaps now indicate over a 90% chance of a 25-basis point cut at the meeting on August 6th. This suggests that a cut is no longer a question of “if,” but “when.” For traders, the focus shifts to the mood of the RBA, rather than just the cut itself. Implied volatility on Australian dollar options and short-term bond futures is currently high ahead of Hauser’s speech. If he aligns with the market’s expectations, this volatility is likely to decrease, creating a chance for those looking to sell options.

Major Turning Point

This moment is a major turning point since the RBA has kept the cash rate at 4.35% for more than a year. This change is what we’ve been waiting for since the aggressive rate hikes in 2022 and 2023. Shifting to an easing cycle will shape trading trends for the rest of the year. The currency market has already reacted, with the Australian dollar dropping below the 0.6500 mark against the U.S. dollar this week. Any further hints of a dovish approach from Hauser could lead to an additional decline. Traders should be prepared for increased downside risk with the Aussie dollar. Create your live VT Markets account and start trading now.

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