The Reserve Bank of Australia (RBA) is up for releasing a minute statement of its July 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-wide expectations of announcing a quarter percentage cut to its benchmark cash rate during the meeting. As a result, investors will seek more details of the catalysts that led to such a decision in order to predict any such upcoming moves and predict near-term trade direction of the AUD/USD pair.
Ahead of the minutes, TD Securities spotted clues that investors will seek in the minutes:
With the RBA indicating that it stands ready to cut the cash rate further 'if needed' following back to back cuts, the market will look at the minutes of the July policy meeting for clues and signs that could get the Bank to cut again before year end.
How could the minutes affect AUD/USD?
With the latest data from the largest customer China pleasing the Aussie buyers amid the US Dollar (USD) weakness, investors will cheer an upbeat statement (if any) ahead of Thursday’s Australian jobs report. The RBA Governor’s repeated emphasis on the unemployment rate highlights the importance of jobs report for near-term direction.
Technically, 0.7048/52 area comprising early-April lows and highs marked since May 07 limits the pair’s upside towards late-April high near 0.7070, 0.7110 and 0.7130/35 resistances. Alternatively, 100-day exponential moving average (EMA) level of 0.7018 and 0.7000 round-figure seem key supports on the downside, a break of which can recall 0.6980 and 0.6910 on the chart.
Key Notes
AUD/USD on the bids around 12-day top ahead of RBA minutes
AUD/USD Analysis: bulls in the driver seat ahead of RBA’s Minutes
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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