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

Alike every first Tuesday of the month, the Reserve Bank of Australia (RBA) is up for conveying the latest monetary policy meeting and Interest Rate Decision around 03:30 AM GMT.

The RBA is expected to keep the benchmark interest rate unchanged around 0.10%. However, the latest jump in the Aussie inflation pushes market players to hope for the policymakers’ hawkish comments, as well as dropping the Yield Curve Control (YCC) measures, which in turn highlights today’s monetary policy meeting for the AUD/USD traders.

Following the RBA decision, Deputy Governor Guy Debelle is also up for speaking at a virtual panel discussion and will be watched for details of the policy moves, if any.

Ahead of the event TD Securities said,

On the other hand, Westpac said,

How could the RBA decision affect AUD/USD?

AUD/USD pokes intraday high around 0.7530 ahead of the key RBA decision during early Tuesday. The Aussie pair seems to prepare to the disappointment as firmer US Dollar Index (DXY) and mildly offered stock futures have been rejected to print the latest gains.

Although the firmer inflation and the RBA’s inaction back hawkish expectations of a YCC move, any disappointment shouldn’t be taken lightly amid a risk-off mood. However, the underlying price pressure and the recent improvement in Australia’s covid conditions, coupled with the market’s cautious mood ahead of Wednesday’s Fed verdict, can keep the AUD/USD bears challenged.

Technically, AUD/USD portrays a rising wedge bearish chart pattern near the highest levels in four months, suggesting a stronger bearish reaction should the RBA disappoints.

Key quotes

AUD/USD retreats towards 0.7500 ahead of RBA

AUD/USD Price Analysis: Rising wedge around four-month top probes bulls below 0.7550

Reserve Bank of Australia Preview: Reality check for Australian policymakers

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.