Early Tuesday morning in Asia, at 00:30 GMT for the world, the Reserve Bank of Australia (RBA) will release minutes of the latest monetary policy meeting held during the initial October.
The RBA’s October month monetary policy meeting matched wide market forecasts of no rate cut and an intact bond-buying program. However, chatters concerning the economic impacts of the coronavirus (COVID-19) pushed the policymakers to convey that they, “Will maintain highly accommodative settings as long as is required.”
The bearish sentiment could also be witnessed in the latest appearance of RBA Governor Philip Lowe who not only ruled out any rate hikes in the upcoming three years but also showed readiness to take the benchmark rate from 0.25% to 0.10% if needed.
While central bankers from the US, Japan and Europe are already pitching for the fiscal stimulus, no such noise has been heard from Australia. As a result, AUD/USD traders might look for additional bearish hints in the upcoming RBA minutes.
Concerning the event, Westpac said,
The October RBA meeting minutes will provide additional color on the Board’s view of risks to the economy and the outlook for policy.
TD Securities also considers the event as having importance while saying,
RBA Minutes of the October Meeting should provide more color on the Bank's increased focus on jobs, in particular, the comment that 'The Board views addressing the high rate of unemployment as an important national priority'.
How could the minutes affect AUD/USD?
While major communication from the Reserve Bank of Australia (RBA) has been bearish off-late, any more negatives will enable the AUD/USD sellers to conquer the four-month-old support line. However, a positive surprise will magnify the quote’s recent refrains from breaking the key support and push the buyers to look for short-term entries. Though, challenges to the risk-tone, mainly emanating from the US stimulus talks and the COVID-19 woes, can dim the importance of the event’s outcome.
Technically, repeated failures to cross 100-day SMA, currently around 0.7100, push AUD/USD sellers toward attacking an upward sloping trend line from mid-June, at 0.7054 now, a break of which can recall the 0.7000 threshold on the chart. Meanwhile, an upside clearance of 0.7100 needs to cross a falling trend line from September 01, around 0.7200 now, to convince the bulls.
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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