Early Tuesday morning in Asia, at 00:30 GMT, the Reserve Bank of Australia (RBA) will release the minutes of the latest monetary policy meeting held in November.
The Australian central bank surprised markets by announcing a softer rate hike of 0.50% versus 0.75% in its latest meeting, raising expectations that the pivot is already established. The same could be confirmed from the latest comments of the RBA officials and make it important for the policy hawks to step back.
As a result, today’s RBA Minutes will be closely observed for the details on the latest decision, which surprised traders and triggered talks of easy rate hikes moving forward. Also important inside the Minutes statement, especially for the AUDUSD pair traders, will be the economic outlook and the central bankers’ optimism towards overcoming the recession fears.
Westpac is on the same line and said,
the RBA’s November meeting minutes will provide more color around the Board’s 25bp rate hike decision, particularly the 25bp versus 50bp debate (if any?). However, the scope for fresh revelations is limited by what we have already seen since the last meeting, including speeches by Lowe and Bullock and the quarterly statement.
How could the minutes affect AUDUSD?
AUD/USD portrays the market’s indecision as it remains sidelined after pausing a bearish Doji candlestick at the two-month high the previous day.
That said, the Aussie pair’s further upside hinges on how the RBA Minutes manage to keep the bulls happy even after promoting the 50 bps rate hike. That being said, talks over the economic transition and neutral rate, as well as surrounding employment conditions, will also be crucial to watch for short-term AUDUSD forecast ahead of this week’s Australia Wage Price Index for the third quarter (Q3), up for publishing on Wednesday.
Technically, the bearish candlestick formation joins overbought RSI (14) and a failure to provide a daily closing beyond the 100-DMA, around 0.6700 by the press time, to keep AUDUSD sellers hopeful. However, the quote’s further downside needs validation from July’s low near 0.6680.
Key Notes
AUDUSD Forecast: Bulls happily adding at lower levels
AUDUSD subdued after Federal Reserve official’s commentary, as RBA minutes loom
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, which is positive for the AUD.
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