RBA Minutes Stick To The ‘Steady As She Goes’ Script | AUD/USD

Whilst AUD remained confined within its range, we continue to look out for range expansion.

Whilst AUD remained confined within its range, we continue to look out for range expansion.

Summary of RBA’s August minutes

  • Further easing is widely expected around the world
  • AUD recent fall to support exports
  • Consumption supported by tax rebates and stabilisation in housing market
  • Reasonable to expect an extended period of low rates
  • Appropriate to assess global and domestic development before considering further changes to policy
  • Members would consider a further easing if needed

RBA opted to hold rates at the record low rate of 1% in August meeting and, whilst their statement left the door open for further easing, it was s very much a “steady as she goes” approach. Today’s minutes pretty much stick to this script, so the market reaction was muted.

Ultimately the RBA want to see a lower unemployment rate accompany higher wages to fend off further easing on the domestic front. However, actions from other central banks (particularly the Fed) will also impact their policy timing, as to avoid getting left behind for a race to the bottom.

RBNZ surprised markets with a 50bps cut just one day after RBA’s meeting, which puts their OCR on par with RBA’s 1% record low rate. However, it’s likely to be Fed action (or lack of) which could force RBA to ease and sooner. Therefor we’ll keep a close eye on FX Rates could be Quiet until PMIs and Jackson Hole Later this Week. As it stands, the RBA rate indicator sees just a 20% chance of a 25 bps cut in September whilst OIS markets, down from 40% over a week ago. A cut is full priced in for November, whilst OIS doesn’t full price in a cut until February.

The daily trend structure for AUD/USD remains bearish, and as the fall from 0.7082 saw a notable pickup of downside momentum it suggests new lows could eventually be on the cards. However, given the lack of mean reversion we’re on guard for the potential of a deeper retracement. But ultimately, we’re on the look-out for range expansion to mark its next directional move.

  • AUD/USD is now consolidating within a 90-pip range, with support and resistance residing around 0.6735 – 0.6832 respectively. If range expansion is to break above the June low, a deeper retracement is likely on the cards to satisfy counter-trend traders.  
  • However, if prices are to instead drift to resistance, bears could look to fade within the range or position themselves for an eventual downside break.
  • A break below 0.6735 assumes a run for 0.6677, although given the lack of mean reversion, the reward to risk potential appears less desirable if it fails to break to new lows.  


This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.

StoneX Financial Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the StoneX group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), StoneX Financial Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact StoneX Financial Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.

In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither StoneX Financial Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.

StoneX Financial Pte. Ltd. is not under any obligation to update this report.

Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit cityindex.com.sg for the complete Risk Disclosure Statement.