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While the analyst community expects the Reserve Bank of Australia to stand pat on interest rates on Tuesday, the money market rates suggest the central bank could cut borrowing costs, according to Anthony Cheung, head of market aalysis at Amplify Trading. 

“Be mindful of whipsaw price action even if they adopt an expected wait-and-see approach after 50bps intermeeting cut in March,” Cheung tweeted during the overnight trade

However, MNI’s Anthony Barton thinks that money markets are only giving an illusion of rate cut being priced, as the effective cash rate is trading comfortably below the target of 0.25% owing to excess liquidity and hovering just above the RBA’s interest rate on excess reserves (IOER), currently at 0.15%. 

The RBA is set to announce its rate decision at 04:30 GMT. The AUD/USD pair is currently trading 0.6446, representing a 0.37% gain on the day.