AUD/USD Rate Pullback to Adhere to RBA Interest Rate Decision

AUSTRALIAN DOLLAR TALKING POINTS

AUD/USD Rate Pullback to Adhere to RBA Interest Rate Decision

AUD/USD brings back from a brand new yearly high (0.8007) before the Reserve Bank of Australia (RBA) interest rate decision on March 2, however the same from Governor Philip Lowe and Co. may spark a bullish reaction in the Australian Dollar as the central bank Seems to be no rush to change the path for fiscal policy

FUNDAMENTAL FORECAST FOR AUSTRALIAN DOLLAR: NEUTRAL
AUD/ / USD is very likely to adhere to this RBA rate choice as Governor Lowe and Co. are expected to keep the official cash rate (OCR) in the record low of 0.10%, and the board is apparently about a preset course as the central bank plans to"buy an extra $100 billion of bonds issued by the Australian Government and states and territories when the present bond purchase plan is completed in mid April."

It appears as though that the RBA is reluctant to set up more unconventional tools as the minutes from the February assembly insist that"the Bank's policy actions thus far had been working broadly as anticipated," and the central bank could continue to rely upon its balance sheet to achieve its policy goals amid"the simple fact that the money rate was at its effective lower bound."

At precisely the same period, the ASX 30 Day Interbank Cash Rate Futures indicates waning speculation for further financial aid since the March 2021 contract currently reflects a less than 70% chance to get a RBA rate cut, and also the wait-and-see approach for monetary policy may maintain key market trends in place as Governor Lowe and Co."continued to see a negative policy rate as extraordinarily improbable"

That said, the RBA rate choice may spark a bullish response in AUD/USD since the central bank is expected to retain the current course for fiscal policy, along with the pullback from the February large (0.8007) may turn out to be an fatigue in the wider trend rather than an alteration in behavior such as the price action observed in 2020.

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