Wait-and-See RBA Policy to Keep AUD/USD Rate Under Pressure

Trading a News: Reserve Bank of Australia (RBA) Interest Rate Decision

The Reserve Bank of Australia (RBA) assembly might do small to change a near-term opinion for AUD/USD as a executive bank is widely approaching to keep a executive money rate (OCR) during a record-low of 1.50%.

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The RBA might merely try to buy some-more time as ‘inflation is low and is approaching to sojourn so for some time,’ and Governor Philip Lowe Co. might hang to a stream book as ‘household income has been flourishing solemnly and debt levels are high.

With that said, a uninformed tongue entrance out of a RBA might continue to tame expectations for a 2018 rate-hike, with a Australian dollar during risk of confronting additional headwinds over a residue of a year as a executive bank stays in no rush to exercise aloft borrowing-costs.

However, an astonishing change in brazen superintendence for financial process might hint a miscarry in AUD/USD, with a collection of hawkish comments lifting a risk for a miscarry in a Australia dollar generally if a executive bank starts to uncover a larger eagerness to normalize financial policy. Sign adult and join DailyFX Junior Currency Analyst Daniel Dubrovsky LIVE to cover a RBA meeting.

Impact that a RBA rate preference had on AUD/USD during a prior meeting

June 2018Reserve Bank of Australia (RBA) Interest Rate Decision

AUD/USD 5-Minute Chart

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As expected, a Reserve Bank of Australia (RBA) hold a executive money rate (OCR) during a record-low of 1.50% in June, and it seems as yet a executive bank is in no rush to change a financial process opinion as ‘recent information on a Australian economy have been unchanging with a Bank’s executive foresee for GDP enlargement to collect up, to normal a bit above 3 per cent in 2018 and 2019.

With that said, a RBA might validate a wait-and-see proceed via 2018 as ‘the low turn of seductiveness rates is stability to support a Australian economy,’ and a executive bank might continue to tame expectations for an approaching rate-hike as ‘wages enlargement stays low.’ The RBA assembly sparked a singular reaction, with AUD/USD mostly consolidating via a day to tighten during 0.7616. Learn some-more with a DailyFX Advanced Guide for Trading a News.

AUD/USD Daily Chart

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  • Broader opinion for AUD/USD stays slanted to a downside as both cost and a Relative Strength Index (RSI) continue to lane a bearish formations from progressing this year, with a monthly opening operation in concentration as a span slips to a uninformed 2018-low (0.7311).
  • Need a tighten subsequent a 0.7320 (50% expansion) to 0.7340 (61.8% retracement) segment to open adult a subsequent jump around 0.7230 (61.8% expansion) with a subsequent area of seductiveness entrance in around 0.7150 (161.8% expansion) to 0.7180 (61.8% retracement).

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— Written by David Song, Currency Analyst

Follow me on Twitter during @DavidJSong.

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