When are the RBA Monetary Policy Statement and how might they affect AUD/USD?

Early Friday morning in Asia, at 01:30 GMT, the Reserve Bank of Australia (RBA) will release its quarterly prints of the Monetary Policy Statement (MPS).

The Australian central bank surprised markets by announcing a 0.25% rate hike earlier in the week, after pausing its 10-time rate hike trajectory in the previous monetary policy meeting. However, the policymakers have been trying to convince markets that they can defend the hawkish rate lift cycle, which in turn makes today’s RBA MPS more important for the AUD/USD pair traders.

Apart from looking at the catalysts that helped RBA surprise markets in the last few monetary policy meetings, the economic forecasts will also be important for the AUD/USD pair traders to watch in today’s RBA updates.

Ahead of the event, FXStreet’s Matias Salord said,

The Reserve Bank of Australia (RBA) will release the Monetary Policy Statement on Friday. The report shows the bank's assessment of current economic conditions, both domestic and international, along with the outlook for Australian inflation and output growth. What it says and the projections will be relevant for market participants and for monetary policy expectations.

How could the minutes affect AUD/USD?

AUD/USD portrays the market’s pre-event anxiety as it makes rounds to 0.6700 after rising in the last four consecutive days. The Aussie pair previously took clues from the broad US Dollar weakness, as well as the hawkish surprise from the RBA. Adding strength to the upside momentum are dovish Fed hike and upbeat Australia trade numbers.

Given the recent divergence between the RBA and the Fed’s actions, today’s RBA MPS will be closely watched for linkages on future moves of the Aussie central bank. Should the RBA manages to defend its recent hawkish play, as well as suggest some more in the pipeline, the AUD/USD prices may have further upside to trace.

Technically, AUD/USD needs to provide a daily closing beyond a downward-sloping resistance line from February 14, near 0.6710, to regain the market’s confidence in marking another battle with the 100-DMA hurdle of around 0.6790.

Key Notes

AUD/USD climbs despite risk aversion amidst Fed’s rate hike; RBA SoMP eyed 

AUD/USD Forecast: A bullish Aussie tests levels above 0.6700

About the RBA MPS

The RBA Monetary Policy Statement released by the Reserve bank of Australia reviews economic and financial conditions, determines the appropriate stance of monetary policy and assesses the risks to its long-run goals of price stability and sustainable economic growth. It is considered as a clear guide to the future RBA interest rate policy. Any changes in this report affect the AUD volatility. If the RBA statement shows a hawkish outlook, that is seen as positive (or bullish) for the AUD, while a dovish outlook is seen as negatvie (or bearish).