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When is the RBA interest rate decision and how might it affect AUD/USD?

2017-5-2 10:44:06Trading Strategies
When is the RBA interest rate decision and how might it affect AUD/USD?


RBA interest rate decision overview

The RBA is due to meet today at 0430 GMT where they are fully expected to remain on hold at historically low rates of 1.5%. Due to the ongoing concerns around employment, wages, inflation and the uncertainty around housing market in the Australian economy, the RBA has signalled time and time again since August 2016, the last time they cut rates, that they are on hold. 


How could affect AUD/USD?


With the market fully pricing in a no change and non-event from the RBA, any surprises, either way, could move the market significantly. On of the largest ranges in the Aussie seen over the RBA as an event was over 175 pips on a 4hr chart basis back in 2015. 


However, the statement will be an additional factor that could affect the price of the Aussie depending on the language around the Aussie, USD, commodities, housing, inflation and the job market in particular; any significant variations to the previous language around those subjects could be a catalyst. AUD/USD has been better offered since late March below 0.7750 down to 0.7440 in April's business. An upside surprise from the meeting could eye a break through 0.7540 and the daily 200 ema at 0.7535 for a test of April 22nd's high of 0.7583. To the downside on any ultra-dovish rhetoric and/or jawboning of the currency could ultimately pressure 0.7400 and early Dec 2016 lows.


Key-notes:


RBA to stay on hold with no significant change to forecasts – Westpac

AUD heading lower, RBA on hold for now - Wells Fargo

Events risks in GDT dairy auction, RBA, China, EU unemployment - Westpac

AUD/USD: taking on the 0.75 handle but capped at 0.7542

Forex today: antipodeans outperform, dollar mixed, US data misses yet again

US Dollar consolidates in familiar range below 99

About the RBA Interest 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.