When is the RBA Interest Rate Decision and how could it affect AUD/USD?

After announcing two rate increases in the last meetings, the Reserve Bank of Australia (RBA) is up for another hawkish monetary policy outcome during the scheduled Interest Rate Decision around 04:30 AM GMT on Tuesday.

The RBA is expected to lift the benchmark interest rate by 50 basis points (bps) to 1.35%, mainly to fight inflation and join the league of its foreign friends.

With this, the Aussie central bank could reach near the monetary policy hawks like the Fed and RBNZ, not to forget the BOE and BOC, which makes today’s RBA rate hike interesting. As a result, the RBA Rate Statement will be more important to watch and forecast near-term AUD/USD moves.

Ahead of the event Westpac said,

On the other hand, FXStreet’s Dhwani Mehta says,

How could the RBA decision affect AUD/USD?

AUD/USD remains on the front foot at around 0.6885 while extending the week-start rebound from the yearly low. In doing so, the Aussie pair justifies recently positive developments surrounding the US-China trade ties and firmer Treasury yields, backed by hopes of a hawkish move by the RBA. However, economic fears join China’s covid conditions to keep the buyers in check.

That being said, the RBA’s 0.50% rate hike is already known and may not impress the AUD/USD bulls. Also challenging the moves could be the looming 0.75% Fed rate increase and the anxiety ahead of the Fed Minutes and US Nonfarm Payrolls (NFP).

Hence, AUD/USD prices may portray a knee-jerk reaction to the 0.50 bps rate hike from the RBA. However, the bulls need strongly-worded commentary from the RBA Rate Statement to convince the buyers.

Technically, the convergence of the 10-DMA and the 13-day-old descending trend line, around 0.6900, challenges buyers. Even so, a downward sloping support line from late January, near 0.6755 by the press time, could restrict short-term declines of the AUD/USD pair.

Key quotes

AUD/USD Price Analysis: Bulls stampede towards 0.6900 targets 

AUD/USD approaches 0.6900 amid trader’s anxiety ahead of RBA Interest Rate hike

Reserve Bank of Australia Preview: Will a 50 bps rate hike rescue AUD bulls?

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.