RBA minutes overview

The RBA minutes are due today at 0130GMT after the RBA, as widely expected, left the official cash rate at 1.50% at its latest meeting, unchanged yet again. 

However, the market expects a hawkish rhetoric this time around when more information will be provided on the Board’s expectations. Although, it should be noted that the meeting took place before the Q2 GDP release, as analysts at Westpac explained and added that in a post-meeting speech, Governor Lowe reiterated that balancing support for the labour market and risks to household debt remain front of mind. 

"He also noted that this month’s meeting special discussion was on the Chinese economy," the analysts pointed out. With respect to the strength of the Aussie, RBA's Lowe explained last month that they are prepared to intervene in the currency, but just not at the moment.

How could the minutes affect AUD/USD?

On a daily close below the 20-day sma at 0.7971 and a subsequent follow-through below the 3-month uptrend at 0.7957 with additional daily closes, the bears would be on track to target the 50-day SMA level around the 0.7920 regions. On the wide, 0.7808 is the 14th August low, guarding previous levels of resistance in Feb and March highs at 0.7750. 

Should the bullish trend remain intact throughout the forthcoming major risk events, (RBA minutes and FOMC later in the week), on a break of the 0.80 handle and beyond 0.81 the figure, overhead lies the 0.8162/66 May 2015 peak and a 50% retracement level. On the wide, 0.8295 is the January 2015 high. 

Key notes:

AUD/USD analysis: Aussie down, hit from multiple fronts

AUD/USD Forecast: Cautiously bullish, focus on RBA and Fed

About the RBA minutes

The minutes of the Reserve Bank of Australia meetings are published two weeks after the interest rate decision. The minutes give a full account of the policy discussion, including differences of view. They also record the votes of the individual members of the Committee. Generally speaking, if the RBA is hawkish about the inflationary outlook for the economy, then the markets see a higher possibility of a rate increase, and that is positive for the AUD.