When is the RBA Rate Decision and how could it affect AUD/USD?

RBA overview

The Reserve Bank of Australia (RBA) is all set to announce the latest monetary policy decision at 3:30 am GMT on Tuesday. Although the central bank is widely anticipated not to announce any changes into its present monetary policies, recent signals for unconventional monetary policies from the RBA board makers shifts focus to the rate statement in order to anticipate possible moves in 2020.

Market expectations

TD Securities follows general market consensus while anticipating no fireworks at today’s RBA meeting as it says:

The RBA meets to set policy today and in line with the consensus we look for the RBA to leave rates on hold at 0.75%. Governor Lowe in his speech last week on unconventional policy did not steer markets towards a cut at the December meeting either. He reiterated comments from the November RMA meeting minutes, which suggested the long and variable lags of prior easing means it would need time to assess the data. This essentially rules out a rate cut at this meeting, but we continue to look for a 25bp rate cut in February.

Westpac offers details of likely outcome while saying:

There is little tension over the outcome of the RBA Board meeting today (2:30 pm Sydney/11:30 am Singapore/Hong Kong). Markets are virtually fully priced for a steady hand at 0.75%, with a Feb 2020 rate cut to 0.5% (Westpac’s view) about 2/3 priced. Much of the statement wording should be either identical or very similar to November, including a pledge that the Board will, ‘continue to monitor developments, including in the labor market, and is prepared to ease monetary policy further if needed.’

How could the RBA decision affect AUD/USD?

Given the broad market consensus of a no rate change keeping traders’ eye to the rate statement, mentions of unconventional monetary policy tools as well as heightened risk to the economy will be closely observed. In absence of the same, the AUD/USD could extend its recent run-up towards early-November lows nearing 0.6860 ahead of highlighting 0.6900 mark for the Bulls. Meanwhile, the pair’s downside break of 100-day Simple Moving Average (SMA) level of 0.6815 can recall 50-day SMA level surrounding 0.6800 and November month low near 0.6755.

Key Notes

RBA preview: Probability of rate cut is very low, according to OIS

AUD/USD consolidates gains to 0.6820 ahead of RBA’s rate decision

AUD/USD Forecast: Waiting for the RBA’s decision

About the RBA rate decision

RBA Interest Rate Decision is announced by the Reserve Bank of Australia. If the RBA is hawkish about the inflationary outlook of the economy and rises the interest rates it is positive, or bullish, for the AUD. Likewise, if the RBA has a dovish view on the Australian economy and keeps the ongoing interest rate, or cuts the interest rate it is seen as negative, or bearish.

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility.

Feed news

Latest Forex News

Editors’ Picks

GBP/USD stays below 1.3350 on poor UK PMIs

GBP/USD hits fresh session lows of 1.3335 following an unexpected drop in the UK's Preliminary Manufacturing and Service PMI reports. However, the downside appears capped amid growing Brexit optimism. 


EUR/USD keeps range around 1.1130 on downbeat PMIs

EUR/USD trims gains to trade near 1.1130 region after the sentiment around the euro was dented by the disappointing German and Eurozone Preliminary Manufacturing PMIs. Trade concerns also keep the gains limited. 


UK Elections and US-China trade: Removing Risk Factors

Following the euphoria over the decisive UK election result and the US-China "Phase 1" trade deal markets look primed to end the year on a positive footing. Two of the major risk factors threatening to detail market sentiment into year end have at least been lifted.

Read more

Gold consolidates in a range, flat-lined around $1475 level

Gold extended its sideways consolidative price action through the early European session on Monday and remained confined in a narrow trading band near the $1475 region.

Gold News

USD/JPY clings to modest gains, just below mid-109.00s

The USD/JPY pair edged higher on the first day of a new trading week, albeit lacked any strong follow-through and remained well within the previous session's trading range.