There is a small chance of AUD volatility (to the downside) on today's RBA decision - here's why

The Reserve Bank of Australia monetary policy announcement and Governor Lowe's accompanying statement are due Tuesday 06 April 2021 at 0430 GMT.

There is a small (very small but not zero) chance the RBA announces it is switching its 3-year bond target to the November 2024 Australian government bond (from currently targeting the April 2024 bond).

• The yield target for April 2024 is 0.1%

Nov 2024 is currently trading with a yield of around 0.3% and thus if this became the target (at 0.1%) the yield should drop sharply, which would weigh on AUD

To be clear (again) this is a very small chance, market consensus is April 2024 will remain the targeted bond for now, with a switch to November 2024 likely in August.

---

Earlier:

• Tuesday 6 April 2021 Reserve Bank of Australia monetary policy meeting - preview
• Reuters poll on expectations for the RBA cash rate at Tuesday's meeting
• Preview: RBA could soon tweak the yield-curve control target
• Has the Reserve Bank of Australia (RBA) failed Australians?