When is the RBA Monetary Policy Statement and how could it affect AUD/USD?

Anil Panchal FXStreet

AUD/USD is up for the key moves as the Reserve Bank of Australia (RBA) is up for justifying its latest bold moves, via the quarterly Monetary Policy Statement (MPS) at 01:30 AM GMT on Friday.

Given the RBA’s larger-than-expected rate hike of 25 basis points (bps), in contrast to the inflation fears raised by the Bank of England (BOE) and doubts over the Fed’s 50 bps policy, today’s RBA MPS becomes the key for the AUD/USD traders.

In addition to the reasons that back the latest moves, the RBA’s quarterly economic forecasts will also be important to watch for near-term directions.

How could it affect AUD/USD?

AUD/USD pares the biggest daily loss since February 2021 while picking up bids to refresh intraday high around 0.7125 ahead of the key event. The reason for the pair’s latest recovery is linked to the hopes of an upbeat outcome from the RBA MPS, as well as a return of the full markets.

That being said, the RBA has already conveyed its readiness for further rate hikes and signaled the economic resilience during the latest move on Tuesday. The Aussie central bank also conveyed inflation fears and hence made it logical that the MPS will upwardly revise the previous GDP and CPI forecasts, which in turn can help the AUD/USD prices extend the latest recovery moves. However, any mentioning of economic fears might not be taken lightly.

Technically, AUD/USD pair’s pullback from 100-DMA, around 0.7265 by the press time, eyes to retest the weekly bottom near 0.7030. Also acting as an upside filter is the confluence of a downward sloping trend line from early April and the 200-DMA, near 0.7285.

Key notes

AUD/USD clings to 0.7100 after reversing Fed-led rally on inflation woes, RBA MPS, NFP eyed

AUD/USD Forecast: Can bulls defend the 0.7000 threshold?

About RBA Monetary Policy Statement

The RBA Monetary Policy Statement released by the Reserve bank of Australia reviews economic and financial conditions, determines the appropriate stance of monetary policy and assesses the risks to its long-run goals of price stability and sustainable economic growth. It is considered as a clear guide to the future RBA interest rate policy. Any changes in this report affect the AUD volatility. If the RBA statement shows a hawkish outlook, that is seen as positive (or bullish) for the AUD, while a dovish outlook is seen as negative (or bearish).

Author

Anil Panchal

FXStreet

Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.

AUD/USD flirts with 0.7000, lowest since early August amid bullish USD

AUD/USD hits a fresh low since early August during the Asian session on Friday and looks vulnerable near 0.7000 after breaking below the 200-day SMA overnight. Against the backdrop of the hawkish Fed, a two-day rally in oil prices revives inflation fears and continues to push US bond yields to multi-year highs. Adding to this, geopolitical risks lift the US Dollar to a two-month high, overshadowing RBA rate hike bets and weighing on the pair.

USD/JPY pulls back from three-week high after failing near 159.00

USD/JPY edges lower during the Asian session on Friday, stalling its recent strong move to a three-week high of 159.00 as Japanese Yen bears turn cautious amid intervention fears. Meanwhile, the US Dollar retains a strong bullish undertone as the Fed's hawkish outlook and oil-driven inflation fears continue to push US bond yields to multi-year peaks. Furthermore, the BoJ's dovish rate hike last week might cap JPY and support spot prices.

Gold treads water below $4,300

Gold grabs some buying attention and advances marginally at the end of the week, partially retracing the weekly decline, although it is still navigating below the key $4,300 mark per troy ounce. The fresh selling bias on the Greenback and the modest decline in US Treasury yields appear to support the humble advance in the precious metal.

Crypto Today: Bitcoin and Ethereum edge lower, XRP extends recovery as macro headwinds weigh

The broader cryptocurrency market is consolidating on Friday, with Bitcoin paring losses slightly above $84,000. Ethereum declines in tandem with BTC. Ripple (XRP), meanwhile, paints a different picture.

Fed vs BoJ: Both hiked. The market only believes one of them – and the chart shows which

The Federal Reserve (Fed) and the Bank of Japan (BoJ) have just done something remarkably similar. Both central banks raised interest rates by 25 basis points (bps) last week, both are confronting inflation risks, and both signal that future decisions will depend on incoming economic data.

Fed vs BoJ: Both hiked. The market only believes one of them – and the chart shows which

The Fed and the BoJ have just done something remarkably similar. Both central banks raised interest rates by 25 bps last week, both are confronting inflation risks, and both signal that future decisions will depend on incoming economic data.