The Reserve Bank of Australia decides on Tuesday 3 November at 03:30 GMT, and the market arrives with a hike largely in the price. Pricing cited by Newsquawk implies a 79 to 85 percent chance of a 25 basis point increase to 4.85 percent, after September CPI came in at 4.3 percent.
The Australian dollar closed the week at 0.70318 against the US dollar, down 0.06 percent, in a range of 0.70096 to 0.70681, according to weekly close data compiled by Capital Street FX. That narrow range suggests traders are waiting for the decision rather than leaning on it.
What to watch
- The decision versus the guidance. With a hike mostly expected, the statement and any hint about further tightening may matter more than the move itself.
- The early hour. The announcement lands in the Asian session, when liquidity is thinner and spreads can be wider.
- Same-day politics. US midterm elections also take place on Tuesday, adding to the cross-currents.
Background: reading central bank statements and priced-in expectations. Market commentary only; not a trade recommendation.