AUD/USD Rebound Fails to Convince Analysts Ahead of RBA Meeting

The Australian dollar's rebound before the Reserve Bank of Australia (RBA) meeting has failed to convince some analysts. Research showed that over the past few years, the AUD/USD pair has experienced equal gains and losses on days leading up to RBA meetings. When looking at a broader time frame, including data from 2018 to 2023, the median return fell close to zero. This suggests that taking a directional position based on historical trends may not be wise.

The analysis found 44 episodes of AUD/USD movements around RBA meetings. Of these, half resulted in gains and half in losses. The median return was almost zero, indicating that there is no clear pattern or bias. As a result, one analyst is not taking a directional position on the pair and has set a central reference point of 0.7025 for October 27th.

The external deterioration of Australia's economy and the recent data-driven recovery view were initially considered as potential reasons to take a side. However, these views did not hold up under further analysis.