The Reserve Bank of Australia quarterly Statement on Monetary Policy (SOMP) is due at 0030 GMT
Earlier preview here (via ANZ):
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Preview via Westpac (this is a in brief from a detailed note from WPAC .. I've focused on the AUD comments ... bolded):
Statement on Monetary Policy (SoMP) ... providing an opportunity to present revised forecasts and a fuller elaboration of (RBA) views
- We do not expect to see a major shift this time around. The Bank will acknowledge the more positive tone from abroad and from some of the domestic data. It may also alter its commentary, particularly around the AUD. However, its central view from late last year - that "continuing spare capacity in the economy and the subdued outlook for inflation mean that there is not a strong case for a near-term adjustment in monetary policy" - is likely to remain in place.
The technical assumptions underpinning the RBA's forecasts are unlikely to prompt shifts either.
While the currency is higher against the US dollar, 80¢ currently vs 77¢ in the November SoMP, it is unchanged on a TWI basis, at 65 - and hence unlikely to be a reason to revise growth forecasts.
- That said, the currency move is likely to see a shift in commentary.
- The Governor's statement following the December Board meeting included wording changes that indicated the Bank was less concerned about the AUD, noting simply that "the Australian dollar remains within the range that it has been in over the past few years". It may choose to reinstate the wording that had been in place previously: "An appreciating exchange rate would be expected to result in a slower pick-up in economic activity and inflation than currently forecast."
