Reserve Bank of Australia policy outlook hinges on upcoming minutes and jobs data

The Australian Dollar faces a week of potential volatility as markets await key economic indicators that could clarify the Reserve Bank of Australia’s (RBA) next steps regarding interest rates.

Attention is focused on the release of the September RBA meeting minutes and the upcoming labor force survey. The minutes will be scrutinized to determine if the central bank’s resolve for further tightening matches the softer tone struck by Governor Michele Bullock following the September decision to raise the cash rate to 4.60%. While Westpac anticipates another rate increase to 4.85% by December, CBA suggests the hurdle for further hikes has risen.

Employment data is also expected to play a critical role. Consensus forecasts suggest unemployment will remain steady at 4.6%, the highest level since late 2021. Analysts are watching for job growth figures, with Westpac forecasting 20,000 new jobs while CBA expects a more modest 10,000. Ultimately, many market participants view the quarterly CPI data due on October 28 as the most significant upcoming catalyst for the Australian Dollar.