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

In yet another emergency meeting form the key global central banks, the Reserve Bank of Australia (RBA) is likely to open its artillery to combat the coronavirus (COVID-19) at 03:30 GMT.

Amid widespread coronavirus outbreak and global rush to hoard the US dollar, the Aussie central bank is anticipated to announce a 0.25% rate cut as well as measures on the recently famous Quantitative Easing (QE).

Analysts at the Australia and New Zealand Banking Group (ANZ) follows the market consensus while saying,

The RBA will release a statement today. A 25bp rate cut to the effective lower bound of 0.25% is expected, along with forward guidance and detail about QE. The consensus is that QE will be in the form of yield curve control. We agree that this seems most likely. But given the developments of the past week we can’t rule out the RBA taking a different approach.

Westpac is also on the same side,

At 2:30pm Sydney/11:30am Sing/HK, the RBA will announce its policy rate decision. Westpac expects a 25bps cut, lowering the cash rate to its effective lower bound of 0.25%, and the adoption of QE. This will be followed by an address from RBA Governor Lowe at 4:00pm Sydney.

How could the RBA decision affect AUD/USD?

Amid broadly pessimistic expectations, backed by the virus fears, the RBA has the chance to disappoint the bears after the recent employment data flashed surprising positive Employment Change and Unemployment Rate figures. In doing so, buyers will look for either a moderate rate cut or QE or signals of no more fight against the pandemic.

On the contrary, the Aussie pair is very much depressed due to the broad US dollar strength and doubts over the global economy to recover from the epidemic. As a result, the outcomes matching expectations might keep the bears at the helm.

Concerning this, FXStreet’s Valeria Bednaris said,

The AUD/USD pair is down for an eighth consecutive day, and at levels not seen since early 2003. Market players continue to run into the greenback amid fears, which means that extreme oversold conditions in the pair are being ignored. An encouraging employment report and a moderate announcement from the RBA may help it correct higher, although there’s no reason for the rally to extend. Once the dust settles, sellers will likely reappear. The main support is the 0.5800 figure, where the pair set a monthly high back in June 2002. Below it, the next relevant area to watch is 0.5680. Resistances come at 0.5960 and the 0.6010/20 region. 

Key quotes

RBA and Australian Employment Preview: Useless rate cut to do no good to Aussie

AUD/USD stays below 0.5800 despite surprise upbeat Aussie jobs report

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.

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