When is the RBA Monetary Policy Statement and how could it affect AUD/USD?

AUD/USD is up for the key moves as the Reserve Bank of Australia (RBA) is up for justifying its latest bold moves, via the quarterly Monetary Policy Statement (MPS) at 01:30 AM GMT on Friday.

Given the RBA’s larger-than-expected rate hike of 25 basis points (bps), in contrast to the inflation fears raised by the Bank of England (BOE) and doubts over the Fed’s 50 bps policy, today’s RBA MPS becomes the key for the AUD/USD traders.

In addition to the reasons that back the latest moves, the RBA’s quarterly economic forecasts will also be important to watch for near-term directions.

How could it affect AUD/USD?

AUD/USD pares the biggest daily loss since February 2021 while picking up bids to refresh intraday high around 0.7125 ahead of the key event. The reason for the pair’s latest recovery is linked to the hopes of an upbeat outcome from the RBA MPS, as well as a return of the full markets.

That being said, the RBA has already conveyed its readiness for further rate hikes and signaled the economic resilience during the latest move on Tuesday. The Aussie central bank also conveyed inflation fears and hence made it logical that the MPS will upwardly revise the previous GDP and CPI forecasts, which in turn can help the AUD/USD prices extend the latest recovery moves. However, any mentioning of economic fears might not be taken lightly.

Technically, AUD/USD pair’s pullback from 100-DMA, around 0.7265 by the press time, eyes to retest the weekly bottom near 0.7030. Also acting as an upside filter is the confluence of a downward sloping trend line from early April and the 200-DMA, near 0.7285.

Key notes

AUD/USD clings to 0.7100 after reversing Fed-led rally on inflation woes, RBA MPS, NFP eyed

AUD/USD Forecast: Can bulls defend the 0.7000 threshold?

About RBA Monetary Policy Statement

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 negative (or bearish).