When are the RBA minutes and how might they affect AUD/USD?
Early Tuesday morning in Asia, at 01:30 GMT, the Reserve Bank of Australia (RBA) will release minutes of the latest monetary policy meeting held during July.
The RBA’s July month monetary policy meeting matched wide market forecasts of no rate change and an intact Quantitative Easing (QE). However, statements like “Unlikely employment, inflation goals will be achieved before 2024,” kept policy doves hopeful. Also disappointing for the markets were comments from RBA Governor Phillip Lowe who said, “This is the basis of our guidance that we do not expect the cash rate to be increased until 2024 at the earliest.”
It should, however, be noted that the AUD/USD prices have recently slumped over the Delta covid variant concerns and hence traders seek consolidation, which in turn could offer a magnified response to the minutes in case of surprises. Hence, today’s RBA Minutes become the key event.
Westpac is on the same line and said,
At 11:30 am AEST, the RBA will publish the minutes of its significant July policy meeting, at which the Board announced a tapering of its QE program to $4bn/week and retained the April 2024 bond as the yield target bond. There should be extra attention paid to the minutes given that the next three public events on the RBA’s calendar have been postponed due to Sydney’s lockdown.
How could the minutes affect AUD/USD?
AUD/USD bounces off intraday low to regain 0.7350 ahead of the event. In doing so, the Aussie pair consolidates the previous day’s heavy fall amid cautious sentiment. Also favoring the quote could be the hopes of a large divide among the RBA policymakers on the central bank’s latest dovish outlook, which in turn should extend the latest corrective pullback.
Though, extended local lockdowns in Australia and reflation fears elsewhere, not to forget US-China tussles, may keep AUD/USD prices under pressure.
Technically, highs marked during September and November 2020 offer immediate support to AUD/USD around 0.7340, a clear downside break of which will direct the bear to the October highs near 0.7245. Meanwhile, the 0.7400 threshold and July 09 lows near 0.7410 guard the pair’s short-term upside.
Key Notes
AUD/USD: Bears take a breather around 0.7350, RBA Minutes eyed
AUD/USD trampled all the way to critical monthly support base
AUD/USD Forecast: Not yet at a bottom
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.