The AUD/CHF currency pair rose to a fresh 7-week high on Tuesday, after the Reserve Bank of Australia reinforced bets that interest rate cuts were likely still some way off.
The minutes of the RBA’s February policy meeting revealed the central bank required more time to be confident inflation was easing before it could rule out another rate hike.
The minutes showed RBA policy makers considered another 25 basis point rate hike, but decided to keep borrowing costs steady as progress had been made on inflation.
However, policy makers “noted that it would take some time before they could have sufficient confidence that inflation would return to target within a reasonable timeframe,” the minutes stated.
The RBA Board expects inflation to go back to the target range of 2%-3% in late 2025 and decelerate further to the midpoint of that range in 2026.
Markets are pricing only 36 basis points of rate cuts by the Reserve Bank of Australia this year. A rate cut is not likely to occur until August or September, futures data showed.
Meanwhile, data showed on Tuesday that Switzerland’s trade surplus had widened to CHF 2.8 billion in January from a 13-month low of CHF 1.3 billion in December.
Total exports shrank 1.6% year-on-year to CHF 21.2 billion as a result of lower shipments of vehicles, precision instruments and metals.
As of 11:34 GMT on Tuesday the AUD/CHF currency pair was edging up 0.20% to trade at 0.5780. Earlier in the session, the minor Forex pair went up as high as 0.5781. The latter has been the pair’s strongest level since January 2nd (0.5784).
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