Early Tuesday morning in Asia, at 01:30 GMT, the Reserve Bank of Australia (RBA) will release the minutes of the latest monetary policy meeting held in August.
In August, the RBA announced the third consecutive rate hike worth 50 basis points (bps). Even so, the quarterly Monetary Policy Statement drowned the AUD/USD prices despite the rate lift by citing the growth concerns.
Although the RBA is more likely to keep its hawkish bias, the latest challenges for the critical customer China and macroeconomic woes could probe the policymakers to adhere to softer rate increases in the future. The hints for such exciting events will likely be watched in today’s RBA Minutes, making it crucial for the AUD/USD pair traders.
Westpac is on the same line and said,
RBA’s August meeting minutes will provide color around the third consecutive 50bp hike and risks to the outlook. Interest in the release is tempered somewhat by the intervening Statement on Monetary Policy.
How could the minutes affect AUD/USD?
AUD/USD holds lower ground near 0.7020 as bears take a breather ahead of the key RBA Minutes, especially after the biggest daily fall in a fortnight. In addition to the pre-event anxiety, an absence of significant data/events and mixed concerns surrounding inflation and growth also appear to restrict immediate pair moves.
That said, the Aussie pair’s further downside hinges on how the RBA Minutes manage to keep the bulls happy even if they know that the 50 bps rate hike is given. That being said, talks over the economic transition and neutral rate, as well as surrounding employment conditions, will also be crucial to watch for short-term AUD/USD forecast ahead of this week’s key Wage Price Index for the second quarter (Q2), as well as July’s jobs report.
Technically, a clear U-turn from the 200-DMA hurdle, around 0.7120 by the press time, directs AUD/USD prices towards the previous resistance line from April 20, close to 0.6980 at the latest.
Key Notes
AUD/USD stays pressured towards 0.7000 ahead of RBA Minutes
AUD/USD Forecast: Steeper decline on a break below 0.6980
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 complete 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, which is positive for the AUD.
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