RBA Rate Decision overview
The Reserve Bank of Australia's (RBA) latest rate decision, due today at 04:30 GMT, is widely expected to see the central bank remaining on hold at 1.5%. The RBA is anticipated to remain frozen on rates for the foreseeable future, and an increasing number of analysts are projecting that the central bank will remain stuck until next year. Key growth factors continue to miss the mark for the Australian economy, and as analysts at TD Securities noted, "Recent commentary from the RBA suggests they would be more comfortable with wages growing closer to 3% than the current 2% before hiking. Also Gov Lowe indicated wages growth of 2% and reasonable productivity growth would not see inflation above 2.5% on a sustained basis. So the RBA would be hard pressed to relay a hawkish stance. The Bank has gone to some length to relay its 'gradual' and steady approach to monetary policy."
How could it affect the AUD/USD?
The Aussie has been leaning to the downside since the beginning of this week, exacerbating the AUD/USD's recent declines and leaving the AUD hanging at a fresh low for 2018 just ahead of the RBA rate call. With the Aussie trading at 0.7340, a more dovish than expected showing from the central bank could see the pair continue dropping past today's low of 0.7310 and giving bears a chance to break the 0.7300 key handle, while an unexpectedly hawkish statement from the RBA could see a bullish correction into the week's opening high of 0.7409.
Key notes
Battered Aussie looks to the RBA for direction
AUD/USD analysis: heading into RBA's decision at yearly lows
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.
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