Early Tuesday morning in Asia, at 00:30 GMT for the rest, the Reserve Bank of Australia (RBA) will release minutes of the latest monetary policy meeting held during early March.
The RBA’s March month monetary policy meeting matched wide market forecasts of no rate cut and an intact Quantitative Easing (QE). However, statements like “Board does not expect tight labor market, high wages growth until 2024 at the earliest,” seem to have teased AUD/USD bears off-late.
While traders are more inclined to look for more bearish clues, sustained rejection of the reflation fears, as recently done by RBA Governor Philip Lowe, can help the AUD/USD prices for a short-term term.
TD Securities considers the event as having importance while saying,
RBA Minutes from the RBA's Board Meeting will be scanned for any further details on the Bank's thinking around Yield Curve Control (YCC). This follows the Bank increasing the cost to short YCC bonds.
How could the minutes affect AUD/USD?
Although pre-Fed cautious sentiment and reflation fears are likely to be the major catalysts for near-term AUD/USD moves, traders will read minutes closely for signs of fears among the policymakers concerning the latest QE extension to weigh on the quote. Alternatively, any rejection to the price pressure and economic optimism should be compared to the market sentiment for cleared directions.
Technically, Monday’s Doji candlestick favors AUD/USD buyers to eye the 0.7800 threshold, while also looking at January tops near 0.7820 afterward. Alternatively, a 50-day SMA level of 0.7740 offers immediate support.
Key Notes
AUD/USD Forecast: Bulls remain side-lined
AUD/USD wobbles around mid-0.7700s ahead of RBA 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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