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MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
AUD
AUD/USD is on the back foot, dipping below yesterday's low to sub 0.7180. The A$ is slightly underperforming broader USD strength ahead of the RBA decision. However, looking back at previous RBA decisions this year shows the AUD has often rallied in and around policy announcements.
- The table below plots AUD/USD performance (in percentage change terms) for each of the RBA policy decisions this year. We do this for the day of the announcement and the day after.
- For 3 out 4 policy decision days this year the AUD has ended the trading session higher. Likewise in terms of the session for the day after the policy announcement.
- Average gains for AUD on the day of the policy announcement and the day after is +0.5% this year.
- This compares with close to flat outcomes post RBA meetings in 2021.
- Clearly the RBA's shift to tightening policy has increased the AUD's sensitivity to policy announcements this year.
- As always, there are caveats. A lot may depend on whether the RBA hikes by more than 25bps today in terms of AUD reaction. Guidance around further rate hikes is also likely to be watched closely. Finally, there is broader USD sentiment, which is back on the front foot.
Table 1: AUD/USD Performance Post RBA Policy Meetings in 2022
Source: MNI - Market News/Bloomberg
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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