A Quick Preview of RBA’s Cash Rate Decision, 50+ PIP Volatility Likely in AUD Parity; July 05, 2022

Australia’s Cash Rate Decision & Monetary Policy Statement

Australia has scheduled to release Policy Rate Decision at 0430 GMT/1000 IST. Short term interest rates are the paramount factor in currency valuation – traders look at most other indicators merely to predict how rates will change in the future. Most importantly, Monetary Policy discusses the economic outlook and offers clues on the outcome of future decisions.

Economists expect the interest rate to be hiked up for the third time in a row. The major question is whether the official cash rate will rise to 1.1 or 1.35? In previous meet, the RBA has indicated that a 0.25 or a 0.5 increase is on the table. So according to the market expectations, RBA will probably go with the 0.5 which will bring the cash rate to 1.35 from 0.85. Currently Australian economy is comparatively in safe zone with unemployment down and the inflation rate at 5 per cent and still rising.

Now Australian economy continues to recover from the economic consequences of the Covid-19 pandemic. In addition the economic impacts of the war in Ukraine, the Queensland floods and the current energy crisis have continued to drive inflation rates up forcing the RBA to match that with upward trending interest rates only.

Let’s see how AUD has reacted during the previous data release:

June 07:

May 03:

Technical View:


  • The Aussie remains volatile during early Asian hours ahead of RBA’s Cash Rate Decision.
  • Today pair made intraday high at $0.6894 and low at $0.6866 mark.
  • A day chart is down and H1 chart with triple EMA suggests up trend for the time being.
  • A sustained close above $0.6899 on H1 chart requires for the upside rally.
  • Alternatively, a consistent close below $0.6850 will check further supports.

Take a look and do trade wisely!
Good Luck