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

Early Tuesday morning in Asia, at 01:30 GMT, the Reserve Bank of Australia (RBA) will release its minutes of the latest monetary policy meeting held in July.

The Australian central bank kept the benchmark interest rate unchanged in July after offering two consecutive hawkish surprises in the last. The Aussie central bank’s economic forecasts and the selection of Michele Bullock for the next RBA Governor’s post also highlight the importance of today’s RBA Minutes for the AUD/USD traders, especially amid the lackluster markets.

Apart from looking at the catalysts that justify the RBA’s status quo in the last monetary policy meeting, the prospects of the policy pivot and fears emanating from China will also be important for the AUD/USD pair traders to watch in today’s RBA Monetary Policy Meeting Minutes.

Ahead of the event, Analysts at ANZ said,

RBA minutes will be released at 1:30pm (NZT), providing additional insight into the Board’s ‘finely balanced’ decision to pause in July. Discussion on inflation risks is likely to be balanced.

How could the minutes affect AUD/USD?

AUD/USD picks up bids to 0.6820, bouncing off intraday low, while licking the wounds after declining in the last two consecutive days, mostly sluggish during early Tuesday morning in Asia. In doing so, the Aussie pair portrays the market’s hopes of witnessing hawkish signals from the Reserve Bank of Australia (RBA).

That said, the RBA has already put down its weapons after two hawkish surprises. However, the policymakers also cited the monetary policy action as a ‘finely balanced’ one and showed readiness for further rate hikes. Hence, Aussie pair buyers will especially look for the hawkish signals from the statement, suggesting more numbers of policymakers favoring the rate hikes.

Even so, the recent divergence between the RBA and the Fed’s actions highlights today’s RBA Minutes. Should the RBA manages to defend its recent hawkish play, as well as suggest some more in the pipeline, the AUD/USD prices may have further upside to trace.

It’s worth mentioning that the US Retail Sales is also on the calendar for release and hence the market’s reaction to the RBA Minutes will be limited ahead of the US data.

Technically, a clear U-turn from the 0.6900 mark directs AUD/USD bears toward a one-week-old rising support line surrounding 0.6765, a break of which will highlight the 200-DMA level of 0.6710 as the key challenge for the bears before retaking control.

Key Notes

AUD/USD bears stay hopeful of breaking 0.6800, RBA Minutes, US Retail Sales eyed

AUD/USD Forecast: Near term corrective decline may not be over yet

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.