The Reserve Bank of Australia (RBA) is up for releasing a minute statement of its early-September monetary policy meeting at 01:30 GMT on Tuesday. The central bank met market-wide expectations of announcing no change to its benchmark cash rate during the meeting. However, the rate statement conveyed the downside risk to the global economy while also accepting the fact that rates to remain low for extended period. As a result, investors will seek more 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:
The RBA retained ‘if needed’ in their statement indicating a contingent easing bias, but we will seek clues to see what ‘developments’ would trigger the Bank to ease policy further. Any discussion on QE is likely to garner interest.
On the other hand, the Australia and New Zealand Banking Group (ANZ) highlighted the importance of the meeting minutes as it says:
The release of the RBA’s September minutes will be the primary driver for this pair today, with many hoping to gather hints on the direction of future RBA policy.
How could the minutes affect AUD/USD?
While recent statistics at home and China have failed to lure bulls, traders will seek clues that can stop the central bank’s rate cut trajectory, at least during the current year.
Technically, buyers will enter only if the pair manages to cross 100-day exponential moving averages (EMA) level of 0.6900, also cross early-July low near 0.6910. It should also be noted that the pair’s declines below 50-day EMA level of 0.6845 could recall sellers targeting 0.6820 and 0.6800 supports.
Key Notes
AUD/USD clings to mid-0.6800s ahead of Aussie housing data, RBA meeting minutes
AUD/USD Analysis: consolidation continues, bearish below 0.6830
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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