A non-event is expected but the bias may be skewed towards the downside
The RBA isn't going to change anything in terms of policy mix from its July monetary policy decision but if anything else, the risks for the aussie is that there may be more downside after the meeting than upside potential.
A couple of points to note since the policy meeting last month:
- Melbourne goes into stricter lockdown, that weighs more heavily on the Australian economic outlook in Q3 and dampen recovery prospects.
- AUD/USD trades a little higher at 0.7120-30 levels now compared to just under 0.7000 at the time before the July policy meeting decision.
If anything else, the first point may be what could tip the scales if the RBA decides to take a more dovish approach in terms of their economic view and policy outlook.
On the latter, they did not make a fuss about the strength of the aussie back then and I don't see how current levels will change that. But just be mindful the risks are there in case they feel that the economy could benefit from a weaker currency.
Otherwise, keep the focus on their language about the outlook moving forward.
