The Reserve Bank of Australia’s (RBA) policymakers struggled to tame the treasury yields by extending the Quantitative Easing (QE) during March. However, risk-on mood and the latest consolidation of the global bond coupons should favor the Aussie central bank to maintain status-quo during the April month monetary policy meeting, up for publishing around 04:30 GMT.
That said, recently strong Aussie fundamentals may warrant the RBA to wait for a bit more before announcing any policy change. Though, AUD/USD traders will be keenly watching over the clues of reflation fears and employment data, not to forget the future path, while checking the RBA statement.
Westpac follows market sentiment while saying,
We expect the RBA will maintain current policy settings at the April Board meeting (2:30 pm Sydney/12:30 pm Sing). These settings include: 'targets of 10 basis points for the cash rate and the yield on the 3-year Australian Government bond, as well as the parameters of the Term Funding Facility and the government bond purchase program'.
On the same line, FXStreet’s Valeria Bednarik said,
Markets are optimistic about their return after a long weekend, weighing on the greenback. US Treasury yields are on the rise, which may end up benefiting the American currency in the next few hours. Ahead of the RBA, the pair is mildly bullish in the near term but overall neutral. In the 4-hour chart, it is above a flat 20 SMA, while the longer moving averages head modestly lower above the current level. The pair could advance towards the 0.7730/70 price zone on a break above 0.7675, while a disappointing outcome and a break below 0.7600 could see the pair retesting the year low at 0.7531.
How could the RBA decision affect AUD/USD?
AUD/USD stays mildly bid around 0.7650, up 0.10% intraday, ahead of the key monetary policy decision, while cheering the risk-on mood. Should the RBA step back from upbeat economic analysis, which is less likely, the quote can again eye the 0.7560-55 support zone comprising neckline of the short-term head-and-shoulders. Meanwhile, a daily closing beyond 100-day SMA, around 0.7640, enables AUD/USD buyers to keep their eyes on the mid-March low surrounding the 0.7700 threshold.
Key quotes
AUD/USD: Bulls cheer upbeat markets around mid-0.7600s, RBA in focus
Reserve Bank of Australia Preview: Optimistic but on hold
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.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD stays in positive territory above 1.0850 after US data
EUR/USD clings to modest daily gains above 1.0850 in the second half of the day on Friday. The improving risk mood makes it difficult for the US Dollar to hold its ground after PCE inflation data, helping the pair edge higher ahead of the weekend.
GBP/USD stabilizes above 1.2850 as risk mood improves
GBP/USD maintains recovery momentum and fluctuates above 1.2850 in the American session on Friday. The positive shift seen in risk mood doesn't allow the US Dollar to preserve its strength and supports the pair.
Gold rebounds above $2,380 as US yields stretch lower
Following a quiet European session, Gold gathers bullish momentum and trades decisively higher on the day above $2,380. The benchmark 10-year US Treasury bond yield loses more than 1% on the day after US PCE inflation data, fuelling XAU/USD's upside.
Avalanche price sets for a rally following retest of key support level
Avalanche (AVAX) price bounced off the $26.34 support level to trade at $27.95 as of Friday. Growing on-chain development activity indicates a potential bullish move in the coming days.
The election, Trump's Dollar policy, and the future of the Yen
After an assassination attempt on former President Donald Trump and drop out of President Biden, Kamala Harris has been endorsed as the Democratic candidate to compete against Trump in the upcoming November US presidential election.