Image source: Piotr Swat © 123RF.com
The Governing Council of the Reserve Bank of Australia is meeting tomorrow, and the market forecasts concerning the likely outcome from the meeting are similar to the ones regarding BOE's meeting on Thursday.
The consensus forecasts do not project any changes to the near-negative interest rate, which is currently maintained at 0.25 per cent. However, the Council, too, could decide to ramp up its asset-purchasing program in a bid to address the most recent global developments.
Following the last monetary policy meeting of the RBA, in the Council's post-decision statement it was argued that:
"The Bank has injected substantial liquidity into the financial system through its daily open market operations to support credit and maintain low funding costs in the economy. It will continue to ensure that the financial system has sufficient liquidity. Given the substantial liquidity that is already in the system and the commencement of the Term Funding Facility, the daily open market operations are likely to be on a smaller scale in the near term. Operations at longer terms will continue, but the frequency of these operations will be adjusted as necessary according to market conditions."
It, therefore, remains to be seen whether the Bank has deemed it necessary to reduce the scale of the daily open market operations, or the worsening of the global economic situation would prompt the RBA to implement an even more accommodative stance.
The outcome of tomorrow's meeting is likely to have a strong impact on the Australian dollar, which appears to have reached an intermediate peak in its advancement against other major currencies.
The AUDUSD looks as though the pair has finished establishing a 1-5 impulse wave pattern. Its forthcoming development is going to be dependent on the RBA's monetary policy decisions concerning the near-term.
AUDUSD 4H Price Chart. Image source: Trendsharks ©, created with TradingView.com
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