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

Although the Reserve Bank of Australia (RBA) announced no monetary policy change during its early-November meeting, while matching wide market expectations after the October month’s rate cut, the Aussie traders will be on the lookout of details for near-term rate direction. In doing so, the minute statement of the latest monetary policy meeting, up for publishing at 00:30 GMT on Tuesday, will be the key to watch.

Given the broadly neutral rate statement, investor’s focus will be on the policymakers’ readiness to use the unconventional monetary policy tools in case needed. It should, however, be noted that the quarterly Statement of Monetary Policy (SoMP) downgraded the growth forecasts and kept the fears of further rate cuts alive. By the press time, markets are pricing a 20% chance of another rate cut in the December meeting and hence any strong clues for/against the same will be watched carefully.

Westpac anticipates a less reaction to the RBA minutes while saying,

The minutes from the RBA Board’s 5 November meeting are due at 11:30 am Syd/8:30am Sing/HK. While forecasts were left relatively unchanged in the Statement on Monetary Policy, the overview noted, “the Board was mindful that rates were already very low and that each further cut brings closer the point at which other policy options come into play”. There is limited potential for market impact given that since the meeting we have seen a very lengthy quarterly statement.

TD Securities emphasize the recent outlook at the RBA while highlighting the importance of the event,

The SoMP indicated the Bank is prepared to ease further, but the Bank does not appear in a rush to cut consistent with the gentle turning point narrative. The Minutes are likely to reiterate this. It’s early days but that upbeat outlook does look challenged in our view. The market is likely to focus on any discussion centered around unconventional monetary policy.

How could the minutes affect AUD/USD?

Given the present uncertainty surrounding the phase one trade deal between the United States (US) and China, coupled with a no change in the latest monetary policy, the RBA minutes are less likely to become a market mover. Though, any clues to the policymakers’ doubts in further rate cuts could be positive for the AUD/USD pair.

Technically, 50 and 100-day Simple Moving Averages (SMA) limit pair’s immediate moves around 0.6815 and 0.6840 ahead of 0.6900. However, any upside beyond the same will aim for 0.6930/37 area including 200-day SMA and the monthly top. Alternatively, 0.6770 and 0.6720 could entertain sellers prior to highlight 0.6700 during the pair’s further weakness.

Key Notes

AUD/USD: Under pressure below 50-day SMA, eyes on RBA meeting minutes

AUD/USD Forecast: Torn between greenback weakness and risk aversion

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.