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Aug 30 - 10:55 PM

AUD/USD - COMMENT:RBA Decision Unlikely To Deter AUD/USD Bulls

By John Noonan  —  Aug 30 - 09:00 PM

The Reserve Bank of Australia meets tomorrow and they are widely expected to maintain the cash rate at 0.25% and continue to target the 3-year government bond yield at 0.25%.
The market will focus on RBA Governor Philip Lowe's statement, which will likely be very similar to the September statement.

The RBA decision and statement should be a non-event for the Australian dollar.
The AUD/USD broke higher on Friday when the USD broadly weakened, but the AUD and NZD were the best performing currencies.
Sentiment towards the AUD/USD is bullish and will likely continue to be after the RBA event.

The AUD is getting support from buoyant risk appetite that has pushed global equity markets to record highs, dovish Fed expectations and strong commodity prices nL1N2FU1NNnL1N2FT0PRnL4N2FU2B4.
The RBA would like the AUD/USD lower, but they have repeatedly said the 30%-plus appreciation since the March low is justified based on fundamentals.

The AUD/USD is poised to test the December 2018 high at 0.7394 and a break targets the 76.4 Fibonacci retracement of the 0.8037/0.5510 move at 0.7516.

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Source:
Refinitiv IFR Research/Market Commentary

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