When are the RBA minutes and how might they affect AUD/USD?

The Reserve Bank of Australia (RBA) is up for releasing a minute statement of its May 07 monetary policy meeting at 11:30 am Syd/9:30 am Sing/HK and 01:30 GMT on Tuesday. The central bank surprised markets by not announcing an expected rate cut while upwardly revising economic growth and inflation forecasts during the meet. However, a statement on monetary policy has already dimmed the charm of today’s RBA minutes by conveying that the upward revision to economic projections was only for near-term.

In any case, traders will still observe details of the minute statement in order to determine chances of a rate cut from the Australian central bank.

Ahead of the release, TD Securities said:

The RBA Board meeting for 7 May was a surprise for the doves as not only did they not cut but voiced trend growth of 2.75%, unemployment eventually reaching 4.75%, and core inflation reaching 2%. Then we found out a few days later that these were medium-term forecasts that relied on two rate cuts being delivered as priced by the OIS curve. Minutes are usually redundant after the release of the SoMP, but these may be worth a skim ahead of a RBA Governor Lowe speech less than an hour later at a lunch for the Economic Society of Australia.

How could the minutes affect AUD/USD?

While latest optimism surrounding the Australian economy, mainly due to election results, could dim impact of negative signals from the minutes, the US-China tension and absence of upbeat data from Australia continue to favor a rate cut from the central bank. 

As a result, the Aussie can revisit the latest lows near 0.6860 on dovish signals while opening the door for January bottom surrounding 0.6830 during further declines. Alternatively, bullish signals might help the pair to cross five-week-old trend-line, at 0.6940, and aim for 0.7000.

Key Notes

AUD/USD: Buyers remain in charge around 0.6910, all eyes on RBA minutes

AUD/USD technical analysis: Aussie bulls protect 0.6900 ahead of RBA

AUD/USD Analysis: bears still dominating Aussie crosses

About the RBA minutes

The minutes of the Reserve Bank of Australia meetings are published two weeks after the interest rate decision. The minutes give a full account of the policy discussion, including differences of view. They also record the votes of the individual members of the Committee. Generally speaking, if the RBA is hawkish about the inflationary outlook for the economy, then the markets see a higher possibility of a rate increase, and that is positive for the AUD.