The Australian central bank is overwhelmingly expected to cut its cash rate by 25 bps from 1.50% to 1.25% today
- Question for ForexLive traders - will the RBA cut today? Anyone want to say no?
- Where to for the AUD on the RBA announcement (rate cut expected) today?
- What's priced in for today's RBA meeting (and beyond)
With markets already having priced in a full rate cut now, I reckon a confirmation of that won't do much to weigh on the aussie so the heavy focus will instead be on the language and more importantly the central bank's outlook on future cash rate decisions.
If anything else, I reckon Lowe & co. will play their cards close to their chest so we may get a scenario of a cut today but no firm mention on any further cuts in the coming meetings. In short, they will once again allude to data dependency before reacting.
As such, the risk for the aussie going into the meeting is skewed towards the upside. If the RBA surprises and doesn't cut, the aussie will be sent flying. Meanwhile, if the RBA does cut but makes no firm reference of more to come over the next few months, profit taking from aussie short positions will ensue.
But once the dust settles, market participants will then digest the language and the statement so let's see what the RBA has in store for us in just under half an hour.
