Australia AUD

Australia Interest Rate Decision

Impact:
High
Source: Reserve Bank of Australia

Latest Release:

Date:
Actual:
0.25%
Forecast: 0.25%
Previous/Revision:
0.25%
Period:
What Does It Measure?
The Australia Interest Rate Decision measures the monetary policy stance taken by the Reserve Bank of Australia (RBA) regarding the official cash rate. This indicator primarily focuses on the cost of borrowing and lending money, assessing its implications for inflation, employment, and overall economic activity across national and regional contexts.
Frequency
The interest rate decision is released on a monthly basis, typically during the first Tuesday of each month, and can include preliminary and final insights depending on economic conditions.
Why Do Traders Care?
Traders closely monitor this event as it influences the Australian dollar (AUD) and Australian equity markets significantly; higher interest rates often lead to a stronger AUD and bullish conditions for stocks, while lower rates may have the opposite effects. Additionally, the interest rate decision impacts market expectations about future economic performance, making it critical for timely economic forecasts.
What Is It Derived From?
The interest rate decision is derived through the RBA's assessment of various economic indicators including inflation rates, labor market data, and GDP growth. This involves extensive analysis of both domestic and international economic conditions, utilizing a broad range of data and surveys from economists, businesses, and consumers.
Description
The interest rate decision stands out in its preliminary and final reporting formats; preliminary data is derived from early assessments and can be subject to future revisions, whereas final data provides a more refined picture of the RBA’s monetary policy stance after comprehensive analysis. This decision is reported as a single figure reflecting either a change in the rate or a confirmation of the existing rate, which traders interpret as an indicator of the central bank's future policy directions.
Additional Notes
The interest rate decision serves as a leading economic indicator reflecting the RBA's view on current economic conditions and future growth prospects. Additionally, it is closely tied to inflation trends, consumer spending, and overall economic activity, influencing not only local markets but also having ramifications on global investment strategies.
Bullish or Bearish for Currency and Stocks
Higher than expected: Bullish for AUD, Bullish for Stocks. Lower than expected: Bearish for AUD, Bearish for Stocks. Dovish tone: Signaling lower interest rates or economic support is usually bad for the AUD but good for Stocks due to cheaper borrowing costs.

Legend

High Potential Impact
This event has a strong potential to move markets significantly. If the 'Actual' value differs enough from the forecast or if the 'Previous' value is significantly revised, it signals new information that markets may rapidly adjust to.

Medium Potential Impact
This event may cause moderate market movement, especially if the 'Actual' deviates from the forecast or there's a notable revision to the 'Previous' value.

Low Potential Impact
This event is unlikely to affect market pricing unless there's an unexpected surprise or a major revision to prior data.

Surprise - Currency May Strengthen
Actual deviated from Forecast on a medium or high impact event and historically could strengthen the currency.

Surprise - Currency May Weaken
Actual deviated from Forcast on a medium or high impact event and historically could weaken the currency.

Big Surprise - Currency More Likely To Strengthen
'Actual' deviated from 'Forecast' more than 75% of historical deviations on a medium or high impact event and may likely strengthen the currency.

Big Surprise - Currency More Likely To Weaken
'Actual' deviated from 'Forecast' more than 75% of historical deviations on a medium or high impact event and may likely weaken the currency

Green Number Better than forecast for the currency (or previous revise better)
Red Number Worse than forecast for the currency (or previous revise better)
Hawkish Supports higher interest rates to fight inflation, strengthening the currency but weighing on stocks.
Dovish Favors lower rates to boost growth, weakening the currency but lifting stocks.
Date Time Actual Forecast Previous Surprise
Apr 07, 2020
0.25%
 0.25%
0.25%