Reserve Bank of Australia (RBA) Rate Decision Preview (AUG 2024)

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By :  ,  Strategist

Reserve Bank of Australia (RBA) Interest Rate Decision

The Reserve Bank of Australia (RBA) kept the cash rate at 4.35% in June, with the central bank acknowledging that ‘inflation is easing but has been doing so more slowly than previously expected.’

Australia Economic Calendar – June 18, 2024

Australia Economic Calendar 08052024 

FOREX.com Economic Calendar

In turn, the RBA warned that ‘it will be some time yet before inflation is sustainably in the target range,’ and reiterated that the ‘Board is not ruling anything in or out’ as the central bank continues to combat inflation. The comments suggest the RBA is in no rush to switch gears as Governor Michele Bullock and Co. promote a data-dependent approach in managing monetary policy, and the central bank may stick to the sidelines at its next meeting as the ‘Board remains resolute in its determination to return inflation to target.’

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AUD/USD Chart – 15 Minute

AUDUSD 15-Minute Chart 08052024

Chart Prepared by David Song, Strategist; AUD/USD on TradingView

AUD/USD edged higher as the RBA kept Australia interest rates on hold, with the exchange rate rallying to fresh weekly highs as it closed the day at 0.6658. However, AUD/USD struggled to extend the advance following the RBA meeting as it ended the week at 0.6642.

Australia Economic Calendar 08052024a

Looking ahead, the RBA is expected to retain the current policy in August, and more of the same from the Governor Bullock and Co. may generate a bullish reaction in the Australian Dollar as the central bank remains reluctant to implement lower interest rates.

However, the RBA may adjust its forward guidance for monetary policy as the recent update to Australia’s Consumer Price Index (CPI) reveals easing inflation, and the meeting may produce headwinds for the Australian Dollar should the central bank start to discuss a rate-cut.

Additional Market Outlooks

US Dollar Forecast: USD/JPY Selloff Pushes RSI into Oversold Zone

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British Pound Forecast: GBP/USD Pending Breakout

--- Written by David Song, Strategist

Follow on Twitter at @DavidJSong

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