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Analyst: Market expectations that a war with Iran could drive up oil prices may prompt some central banks to raise interest rates
Svmuu News: Mitsubishi UFJ Financial Group analyst Derek Halpenny stated in a report that while the market expects oil price hikes triggered by the war in Iran to prompt some central banks to raise interest rates, this scenario will only benefit the currencies of economies where growth remains resilient. He said, “In a weak economic environment, interest rate hikes are typically viewed as negative for a currency.” Against the backdrop of market expectations for further rate hikes and the potential for improved terms of trade driven by rising energy prices, the Australian dollar has emerged as one of the best-performing G10 currencies. LSEG data shows that the market currently prices in an 80% probability of the RBA raising rates by 25 basis points on Tuesday. (Jin Shi)
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