The Reserve Bank of Australia (RBA) is up for releasing a minute statement of its early-October monetary policy meeting at 00:30 GMT on Tuesday. The central bank met market-wide expectations of announcing a 0.25% cut to its benchmark cash rate during that meeting. However, the rate statement conveyed no clear directions for further such actions despite mentioning that rates will remain low for an 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.
Despite increasing odds of another rate cut in November, Westpac seems less hopeful for such action even after expecting a 0.50% cut by February 2020:
“The Reserve Bank delivered the October rate cut from 1% to 0.75% which had been one of our core forecasts since July. We are confirming our call for a further cut to 0.5% in February next year. We acknowledge that there are risks that this move may come as early as December but dismiss the probability of a move as soon as November despite confident (50%) market pricing.”
With this, Aussie traders will be extra attentive to details of minutes while forecasting near-term pair moves.
How could the minutes affect AUD/USD?
While recent statistics at home and China have failed to lure bulls, switching sentiment concerning the US-China trade deal adds to the Aussie traders’ worries, which in turn pushes sellers to seek confirmation of further rate cuts to firm up short positions while buyers will wait for surprises to reverse the latest pullback.
Technically, a clear run-up beyond three-month-old falling trend-line, at 0.6790 now, becomes necessary for the pair to 0.6850 and 100-day Simple Moving Average (SMA) level of 0.6863. Meanwhile, 0.6740 and 0.6700 can entertain sellers prior to flashing 0.6670 again on their radar.
Key Notes
AUD/USD: Above 2-DMA, awaiting key data this week, commencing today
AUD/USD Analysis: Aussie weaker ahead of RBA Meeting’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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