When is the RBA Monetary Policy Statement and how could it affect AUDUSD?

Anil Panchal FXStreet

AUDUSD is up for the key moves as the Reserve Bank of Australia (RBA) is up for justifying its latest moves, via the quarterly Monetary Policy Statement (MPS) at 00:30 AM GMT on Friday. It should be noted that the quarterly readings of the Aussie Retail Sales for the third quarter (Q3) will also be rolled out at the stated time and appears the key for the pair traders.

Given the RBA’s softer rate hike of 25 basis points (bps), in contrast to the inflation fears raised by the Bank of England (BOE) and the US Federal Reserve (Fed), today’s RBA MPS becomes the key for the AUDUSD 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.

Ahead of the data/events, Westpac said,

The RBA’s Statement on Monetary Policy will deliver an update on the RBA’s forecasts and provide more detail surrounding their views. Tuesday’s Board statement provided the headline changes of higher inflation and lower GDP growth. Australia real retail sales are set to slow sharply in Q3 as the spike in retail prices continues to roll through.

How could it affect AUDUSD?

AUDUSD pares the biggest daily loss in two weeks while printing mild gains around 0.6300 ahead of the RBA MPS. The reason could be linked to the market’s preparation for the key event, as well as consolidation before the US jobs report for October.

That being said, the RBA has already conveyed its readiness for further rate hikes and signaled economic resilience during the latest move on Tuesday. However, the likeliness of softer rate hikes in the future and a small span of higher rates left will be interesting to read for the AUDUSD pair sellers.

Technically, a three-week-old ascending support line near 0.6275 challenges the AUDUSD bears targeting the yearly low of 0.6170. Alternatively, recovery moves need validation from the 21-DMA immediate hurdle near 0.6335.

Key notes

AUDUSD: Recessionary fears in Australia and a hawkish Federal Reserve, to keep AUDUSD pressured

AUDUSD Forecast: Battling to retain the 0.6300 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.

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