By Evan Lucas, Market Strategist IG Markets
The meaning is in the detail for the AUD
As the global markets continue to look towards Thursday morning's announcement from the FOMC, Australian investors will be watching two very interesting public policy papers that are released today.
Today sees the release of the RBA policy meeting minutes and the federal government's mid-year budget, and both will affect the AUD in distinctly different ways.
First out of the blocks will be the RBA minutes; the market has seen a master class in how to finesse monetary policy over the past three months. Steven, Debelle and Lowe have all publicly spoken about 'possible intervention' in the currency markets, the 'historically high state of the AUD' and the 'effect it is having on the economy'.
Monetary policy is no surgeon's scalp at to target specific weakness in an economy; it is an art rather than a science and variables outside of the board's control are pulled regardless of the care taken.
Therefore the minutes will have plenty of detail as to how the board currently views the state of play, however I believe it will be light on specifics for the reasoning stated above.
The easing basis that has remained in the final paragraph of every statement since November 2011 will be there as a back-stop to the green shoots the RBA sees in housing, consumer sentiment, and forward guidance.