When is the RBA interest rate decision and how might it affect AUD/USD?

RBA interest rate decision overview

The RBA is due to meet today at 0430GMT where they are fully expected to remain on hold at historically low rates of 1.5%. Due to the ongoing concerns about the Australian economy, with a particular focus on the housing bubble. There is also a shift in rhetoric from other key Central Banks that the RBA will also need to take into consideration. 

However, analysts at ANZ explained that they do not see what would motivate the RBA to drastically shift its tone tomorrow to hint that tightening is on the horizon. "Certainly we do not think that Governor Lowe would be thinking in the same  way that BoC Governor Poloz was when he said “it does look as though those cuts [50bps in 2015] have done their job. We’re just approaching a new interest rate decision, so I don’t want to prejudge that, but certainly we need to be at least considering that whole situation now that capacity –excess capacity – is being used up steadily.”

How could affect AUD/USD?

Any surprises, either way, could move the market significantly. The largest ranges in the Aussie seen over the RBA as an event was over 175 pips on a 4hr chart basis back in 2015. It is expected that the RBA will probably keep policy unchanged rather than ease and that could be enough to give the Aussie a lift as the markets outprice any ideas of their easing bias continuing. 

AUD/USD has been better bid since the early May from the 0.7320's making a recent high of 0.7712.  An upside surprise from the meeting could eye a break through 0.7700 and a key resistance at 0.7750. To the downside on any ultra-dovish rhetoric and/or jawboning of the currency could ultimately pressure 0.7580 ahead of 0.7520.

Key-notes:

Hawkish rhetoric is evident from RBA today? - Nomura

RBA: FX market expecting too much - ANZ

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.