The Reserve Bank of Australia’s (RBA) Monetary Policy Statement examines economic and financial conditions. Establishes the appropriate stance of monetary policy. And analyses the risks to its long-run aims of price stability and sustainable economic development. It is seen as a clear pointer to the RBA’s future interest rate policy. Any modifications to this report have an impact on the AUD volatility. A hawkish outlook in the RBA announcement is considered as good (or bullish) for the AUD. Whilst a dovish perspective is seen as negative (or bearish). The Reserve Bank of Australia has issued the following Monetary Policy Statement:
Rates are projected to peak at 3.75% before falling to 3% by mid-25.
Monetary policy may need to be tightened further.
Further Energy costs will have a significant impact on inflation in the next year.
Furthermore we are committed to returning inflation to goal.
The board seeks to maintain as many jobs increases as feasible.
The longer inflation continues over goal, the more likely a price-wage spiral will occur.
So far, goods deflation has been negligible, but energy price inflation will continue strong this year.
Moreover Inflation is expected to be 4.5% in 2023, 3.2% in 2024, and 3.0% in mid-2025.
By the end of the year, trimmed mean inflation is expected to be 4.0%. By 2023. It will be 3.1%, 3.1% by the end of 2024, and 2.9% by the middle of 2025.
This year, China is expected to comfortably exceed its 5% growth objective.
GDP growth of 1.2% in 2023, 1.7% in 2024, and 2.1% in mid-2025 is forecast.
Reaction on AUDUSD
Following the release of hawkish Reserve Bank of Australia (RBA) minutes, the AUDUSD pair has risen sharply above the round-level resistance of 0.6700.
