RBA meeting minutes overview:
The Reserve Bank of Australia will on Tuesday release the minutes from its June 6 meeting. At the meeting, the RBA decided to retain its interest rate at a record low 1.50 percent for the ninth consecutive meeting. While recent months have pointed toward an upward trajectory for the official cash rate in analysts predictions, there are growing signs that the RBA’s easing cycle may not be over and the markets will be looking for comments to that effect. Importantly, one of the key barriers to rate cuts, the hot housing markets of Sydney and Melbourne, have shown signs of slowing. However, Lowe was speaking yesterday and that may be taken as a prelude to what to expect from the minutes without there being any surprises.
How could the minutes affect AUD/USD?
With the market fully pricing in a' no-change' to rates for the rest of this year, any surprises in the language of the minutes, either way, could move the market significantly. One of the largest ranges in the Aussie seen over events related to the RBA were over 175 pips on a 4hr chart basis back in 2015. The minutes could offer additional insights into the RBA's current mindset in regards to key areas such as the Aussie, USD, commodities, housing, inflation and the job market in particular; with any significant variations to the previous language in the statement or previous minutes around those subjects would be a catalyst.
AUD/USD has been in a correction in June from lows of 0.7374. In recent, trade, the pair broke up through the 0.7600 level. Any upside surprises from the meeting could eye a break towards 0.7640 resistance area while on the flip side, a break below the 10-sma on the 4hr sticks at 0.7570 opens 0.7520.
Key notes:
- AUD/USD analysis: easing from highs, but far from bearish
- AUDUSD: Resistance will be seen at the trend highs at around 0.7630/35
- RBA's Lowe: Growth next couple years likely stronger than recently
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.
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