FXStreet (Bali) - Adarsh Sinha, who serves as Co-Head for Asia Rate Team at Merrill Lynch & Co., notes that today's RBA becomes a close call. Key Quotes "While our baseline view remains that the RBA will keep policy unchanged, this has become a much closer call following the hike in mortgage rates by domestic banks, as well as the much lower-than-expected 3Q CPI inflation data. With more of an economic justification to cut rates, the argument for easing may come down to why not?" "Lowering rates would unlikely be passed on in full by the banks and at the margin would assist some households." "In our economists’ view, it would be a free kick for businesses even though the level of rates is not a problem for this sector. And we think it would also reinforce further downside to the exchange rate as the risk becomes the FOMC will become more dovish." "The near-term outlook for the AUD therefore depends crucially upon the RBA’s policy changes and communication over coming months." "We are comfortable with projecting only a small further decline in AUD/USD (to 0.69) by December, but the downside to this forecast would increase if the RBA delivered further easing." "We continue to expect it to reach 0.65 in 2016 as capital inflows into Australia’s resource sector decline." "External conditions, especially in China, will remain a significant driver of the AUD as well. Further easing measures by the PBoC, evidence of stabilization in onshore liquidity and credit growth, as well as further improvement in home sales suggest the China factor could be marginally more supportive for the AUD compared to 3Q. But the uncertainty remains high." For more information, read our latest forex news.