AUD changed on RBA monetary policy decision – What To Expect

The pair is trading little changed around 0.6790 at the moment as the RBA offered little in terms of anything new for traders and investors on the day.

They mentioned that monetary policy is set to remain accommodative for as long as required while keeping their forward guidance on rates and the yields target unchanged.

That perhaps gives them room to scale back on some recent policy actions if need be, but ultimately they would still prefer it to be accompanied by progress in the labor market and inflation. For some context, the RBA had already stopped QE for a few weeks now:

Overall, I think what was not said is perhaps more important than what was said.

The RBA made no special mention to the recent rise in the Aussie – the currency has gained by over 5% against the dollar since its May meeting – and that may provide buyers with some relative comfort that the central bank doesn’t see it as being a pressing issue yet.

Back to the AUD/USD chart, the 0.6800 level is offering some daily resistance at the moment as the risk mood is keeping more tepid to start the day, but technically there is little stopping a move back towards 0.7000 potentially given the recent run.

A lot will come down to headline risks and how stocks perform, but so far, there hasn’t been any significant hiccup with US-China tensions from last week being brushed aside for now.

The civil unrest in the US remains a wildcard, but it is also the case for the US dollar.