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TD Securities' Senior Strategist Prashant Newnaha notes that recent remarks from RBA Deputy Governor Hauser signal a hawkish stance, aligning with Governor Bullock's emphasis on keeping the March board meeting open for a rate hike. The RBA has maintained a dovish tone since 2022, but recent inflation data and wage growth have reignited speculation about tightening monetary policy. Market participants are now pricing in a 30% probability of a 25-basis-point rate increase at the March meeting, up from near-zero expectations in January. This development could impact global forex markets, particularly the AUD/USD pair. A rate hike would likely strengthen the Australian dollar against the US dollar, affecting trade flows and investment strategies for international traders. Central bank policy shifts also influence commodity prices, as Australia is a major exporter of resources. Traders should monitor upcoming inflation reports and wage data for further clues on RBA's trajectory. For Gulf investors, the RBA's policy direction could indirectly affect regional markets through commodity price fluctuations and capital flows. The Australian dollar's performance against the US dollar is critical for Saudi and UAE investors with exposure to Australian equities or commodities. Key watchpoints include the RBA's March meeting minutes and any follow-up statements from central bank officials.
