RBA Deputy Governor Guy Debelle's speech today entitled 'The State of the Economy' should provide the perfect platform for the RBA to either confirm speculation they are moving to a dovish bias or hose it down.
In its April statement the RBA tweaked the last sentence of the policy paragraph to add: "The Board will continue to monitor developments and set monetary policy to support sustainable growth in the economy and achieve the inflation target over time." nZZN0BJQ00 It was the first time since Philip Lowe became RBA governor in Sept 2016 that the "monitor developments" phrase was included, prompting speculation the RBA is moving closer to easing policy nL3N21K0YW.
The RBA prefers to use key policy speeches rather than the meeting statement to indicate bias.
This was the case in February when the RBA statement was almost identical to the slightly hawkish December statement, only to have Lowe signal a shift to a neutral bias in a speech the next day nL3N21I0T5.
If Debelle's speech at 0340 GMT is viewed as dovish, the AUD/USD will likely break below support at 0.7100/05 and possibly test support at 0.7050/55.
If the speech is neutral, it might start a move towards the key 200-day MA at 0.7196.
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