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

RBA interest rate decision review

While all expect the RBA to stay on hold at 1.5%, this meeting, due at 04:30GMT, the wording in the statement will be analysed for any shifts in policy stance. The Australian economy is gathering momentum, but it isn't there yet. Kohei Iwahara, analyst at Natixis Japan Securities Co., Ltd. exlained that the strong Aussie could delay the economic transition away from the mining sector, by reducing tourism and added:

• "Furthermore, the increase in mining investments has not offset the drop in mining investments yet.
• Australia also needs a stronger labor market so that higher wages can help lift inflation, which undershot the RBA’s target during the second quarter of 2017.
• At the same time, the pick-up in housing prices is been tackled with macroprudential tools, allowing the RBA to remain accommodative."

How could the RBA decision/statement affect AUD/USD?

A particular focus will be on the RBA's outlook for the strength of the Aussie again and  with AUD/USD just 50 pips shy of the 0.8000 psychological level, traditional jawboning of the currency could come into play in today's meeting. Usually, that would equate to offers and in this case. 0.7920 and 0.7880 come in as fisrt support levels.

The YTD high of 0.8065, should draw some attention on anything hawkish as an outcome, especially should there not be any concern for the value of the Aussie from the RBA. 0.8163 is the May 2015 high thereafter. 

Key notes

AUD/USD analysis: RBA and Caixin services PMI take center stage

About the RBA interest rate decision 

The 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.