RBA SoMP: RBA is prepared to be patient as it monitors how the various factors affecting inflation in Australia evolve

Ross J Burland FXStreet

The RBA Monetary Policy Statement (SoMP) has been released by the Reserve bank of Australia with key notes outlined as follows:

SoMP, key notes

Says board is prepared to be patient as it monitors how the various factors affecting inflation in Australia evolve.
Says progress towards the bank's goals has been material, but significant uncertainties surround the inflation outlook.
Says Australia has been affected by these global inflationary pressures, but to a lesser extent than some other advanced economies.
Says upstream cost pressures in housing construction and durable goods are expected to push underlying inflation higher in the near term, but moderate over time.
Says if realised, staff inflation forecasts imply that the bank's policy goals would be achieved sooner than previously envisaged.
RBA sees sees jobless rate 3.75% in year to June 2024;
- uncertainties over labour supply as borders reopen.
Sees trimmed mean inflation 2.75% in year to June 2024;
- significant uncertainties surround inflation outlook.
Sees GDP growth 2% in year to June 2024;
- progress toward bank's goals has been `material'
Sees wage growth 3.25% in year to June 2024;
- pickup in aggregate wages growth likely to be only gradual.

AUD/USD update

AUD/USD Price Analysis: Bulls stay in charge but face a wall of daily resistance

The price is consolidated at this juncture and there needs to be a break of H4 structure, one way or the other, before a trend would be offering trader's an opportunity.

About the SoMP

The RBA Monetary Policy Statement released by the Reserve bank of Australia reviews economic and financial conditions, determines the appropriate stance of monetary policy and assesses the risks to its long-run goals of price stability and sustainable economic growth. It is considered as a clear guide to the future RBA interest rate policy. Any changes in this report affect the AUD volatility. If the RBA statement shows a hawkish outlook, that is seen as positive (or bullish) for the AUD, while a dovish outlook is seen as negatvie (or bearish).

Author

Ross J Burland

FXStreet

Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.

AUD/USD shows resilience below 38.2% Fibo. near mid-0.7100s

The AUD/USD pair touches a one-and-a-half-week low, around the 0.7140 region during the Asian session on Monday, though it lacks follow-through. Spot prices currently trade just above mid-0.7100s, down nearly 0.25% for the day.

USD/JPY: Japanese Yen edges lower vs USD amid Middle East jitters as Fed, BoJ meetings loom

The USD/JPY pair attracts some buyers at the start of a new week and climbs closer to the 154.00 mark during the Asian session, reversing a part of Friday's losses. Spot prices, however, remain confined in a range held over the past week or so and within striking distance of a nearly seven-month low, touched last Tuesday, as traders await this week's key central bank events.

Gold: Fed’s rate decision to drive the next move

Gold reflects a subdued performance at the start of the Federal Reserve’s monetary policy week at around $4,330. Fed’s interest rate expectations heavily influenced last week after the release of the hot United States Producer Price Index and Consumer Price Index reports for August.

Bitcoin consolidates, Ethereum faces hurdle, XRP nears key support

Bitcoin (BTC), Ethereum (ETH) and Ripple (XRP) start the week near crucial technical levels after a broadly bearish performance, correcting over 4%, 1.5% and 5% last week. BTC consolidates around $77,600, while ETH approaches key $2,550 resistance. Meanwhile, XRP trades near its key level around $1.354, making this support level crucial for its near-term outlook.

US Dollar Weekly Forecast: The last line of defense

There was no respite to the downward trend for the US Dollar this week, which added to the prior week’s retracement and at some point flirted with the area of four-month lows. Indeed, after trading at levels just shy of its psychological 100.00 barrier early in the month, the US Dollar Index has come all the way down to challenge the 98.50 zone, extending its negative streak for the third month in a row.

Venezuela’s 65-billion-barrel Oil deal could reshape America’s inflation fight

The United States (US) has secured unprecedented access to part of Venezuela’s vast Oil reserves. The timing is particularly significant as the war with Iran is disrupting Middle Eastern supplies, keeping energy prices elevated and reviving concerns about inflation.