Mitsubishi UFJ: The impact of oil price shocks on economic growth is the key factor determining exchange rate trends

Golden Ten Data reported on March 13 that Mitsubishi UFJ analyst Derek Halpenny stated in a report that market expectations of oil price increases triggered by the Iran war may prompt some central banks to raise interest rates, but this situation will only benefit the currencies of economies whose growth remains resilient. He said, "Raising interest rates in weak economic conditions is usually considered bearish for currencies." Against the backdrop of expectations for further rate hikes and potential improvements in trade conditions due to rising energy prices, the Australian dollar has become one of the best-performing G10 currencies. LSEG data shows that the market currently expects an 80% probability that the Reserve Bank of Australia will raise interest rates by 25 basis points on Tuesday.