The Reserve Bank of Australia (RBA) is up for releasing a minute statement of its April 02 monetary policy meeting at 11:30 am Syd/9:30 am Sing/HK and 01:30 GMT on Tuesday. The central-bank met market expectations of holding the monetary policy intact during the meet but the additional line about monitoring developments in the rate statement and recent comments from the policymakers are something that makes today’s event more important than earlier.
Ahead of the release, analysts at TD Securities said,
RBA Minutes for the April Board meeting will be closely scrutinized for any clarification around the addition of a line at the end of the policy statement. The addition of “The Board will continue to monitor developments and set monetary policy to support sustainable growth in the economy and achieve the inflation target over time.” was widely interpreted as the RBA sending an easing signal at the May Board meeting. With an election and fiscal boost around the corner we see a May cut as highly unlikely.
How could the minutes affect AUD/USD?
In light of recent dovish signals from the Australian central bank and the headline policymakers, traders will search for clues to confirm a future rate-cut in order to drag the Aussie downwards. Should the minute statement provide any hints conveying a downside risk to the economy, the recently added statement to monitor developments could signal a rate-cut is coming from the RBA in near-future, which in-turn can drag the AUD/USD back to 100-day simple moving average (SMA) level of 0.7140 and then to 50-day SMA level of 0.7105.
Meanwhile, lesser emphasis on the activity weakness and recent change in the policy statement, coupled with more light on employment details and likely benefits from the US-China trade talks might propel the Aussie pair to challenge medium-term trend-line, at 0.7185, followed by 0.7195/0.7200 area comprising 200-day SMA. With this, the AUD/USD pair can well aim for 0.7235/40 resistance region.
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.
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