The last week of March was light on data as is usual with the last week of the month, however also as usual the first week throws economic announcements left, right and centre.
Today we have the Reserve Bank of Australia’s policy meeting where they will announce their most recent interest rate decision. Any change to the current cash rate of 2.5% would probably be the most unexpected-shock-decision the market had seen from the RBA in recent history. So the chance of a change in policy is low, which has been the RBA’s rhetoric of late.
What the market will be reading into and assessing will be the RBA’s accompanying statement. The investment community will be trying to gauge things like the RBA’s language so they can line up the ducks and have a punt on their future price direction of the Aussie dollar. Interpretation of future rate rises and a time frame nearer than expected will push the Aussie dollar higher, while the reverse, no anticipation of future rises or even an interest rate cut down the track should see the Aussie weaken.
One major concern that has left the market of late somewhat has been a slow-down in the Chinese-focused mining sector, now being outweighed by the RBA’s other concern a booming domestic property market. There is, however, also some Chinese data due today which could also throw some accompanying volatility into the mix.
Last night the US Federal Reserve’s Janet Yellen spoke stating that the current accommodative monetary policy in the US is here to stay for the foreseeable future. This may be one reason the Aussie dollar found some support against the greenback overnight.
The RBA’s policy decision is at 2.30pm AEDST.