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

The Reserve Bank of Australia (RBA) is up for the monthly monetary policy meeting and Interest Rate Decision on early Tuesday, around 04:30 AM GMT.

While the Aussie central bank isnt expected to alter its monetary policy, making a non-event, comments from the Rate Statement will be the key to watch for AUD/USD traders.

That said, recent fundamentals from Australia dwindle following a snap lockdown and mixed clues concerning Asia-Pacific markets, mainly due to the coronavirus (COVID-19). As a result, bears may look for cautious statements to retake controls amid sluggish markets ahead of the key Aussie event.

Westpac follows market sentiment while saying,

Our central view is that the RBA will maintain current policy settings. However, in recent times, the meetings which have been linked to the Statements on Monetary Policy have incorporated policy initiatives. While we expect that the announcement to extend yield curve control to the November 2024 bond will come at the August board meeting, this is the most likely initiative that could be brought forward to May.

On the same line, FXStreets Valeria Bednarik said,

Investors are hoping for an upward review in the overall outlook, but also for policymakers to retain a certain cautious stance, and repeat that they are ready to add quantitative easing if its needed. For sure, the latest data suggest that Australian central bankers could be much more confident on what's next for the local economy. Still, no fireworks are to be expected.

AUD/USD remains mildly offered, snapping the previous day‘s recovery moves, ahead of the RBA. While the consolidation in the market sentiment and downbeat Australia trade numbers for March could be traced to the pair’s latest weakness, hopes of sober comments from the RBA policymakers, amid sluggish inflation, seem to weigh on AUD/USD as well.

Looking forward, a postponement in the future bond purchase actions is something that could shake AUD/USD. Also in the same line could be sustained support for easy money policies. Alternatively, the RBA is likely to be a non-event and may keep the Aussie pair heavy around mid-0.7700s.

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