The Reserve Bank of Australia will deliberate on the current economic situation in the country, and its Monetary Board of Governors will gather on Tuesday for its monthly monetary policy meeting. The prevailing expectation is for the interest rate to be kept unchanged at the current level of 1 per cent.
During its last meeting in early July, the Board noted that ‘global financial conditions remain accommodative’, and in addition to that, Chinese manufacturing has spiked up for the third consecutive month, as it was revealed in early Monday morning, all of which exhibits signs of global economic recovery and sustainability.
In Australia, inflation has increased with 0.4 points in July to the current rate of 1.6 per cent, which means that inflationary pressures are now nearing the RBA's long-term goal of 2 per cent.
Image source: TradingEconomics.com
The labour market is performing reasonably, with the overall unemployment rate remaining at 5.2 per cent for the fourth consecutive month. In its previous monetary policy statement, the Board of Governors of the RBA stated that:
“Employment has grown strongly over recent years and labour force participation is at a record high. There has, however, been little inroad into the spare capacity in the labour market recently, with the unemployment rate having risen slightly to 5.2 per cent. […] The recent inflation data were broadly as expected and confirmed that inflation pressures remain subdued across much of the economy.” [source]
Thus, there are no apparent reasons for the Reserve Bank of Australia to implement any drastic changes to its current monetary policy stance, and it would be much more likely for the Board of Governors to remain observant for the time being.
Meanwhile, the AUDUSD is currently trading below the lower boundary of the Accumulation stage on the 4H chart, which could be perceived potentially as a formation of a Spring pattern, should the price manage to revert itself back above the 0.67400 price level.
Image source: Trendsharks ©, created with TradingView.com
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