Reserve Bank of Australia days and the Tuesday effect

[Amanhasnoname]

The Reserve Bank of Australia announces monetary policy decisions on the first Tuesday of most months, in the early afternoon local time. For traders in Europe and the Americas, that falls in the early morning or the middle of the night.

The Australian dollar can move sharply on the announcement, followed by a second wave when the governor's statement is read. Spreads widen, and liquidity is thin in the hours when most of the world is asleep.

For scalpers who trade the Asian session, these events are a major volatility point. For those who do not, they may cause unexpected gaps that appear when the day begins.

The calendar is predictable. Mark the dates, and decide in advance whether to trade them. Reviewing historical reactions in AUD pairs gives a sense of the typical move and the speed of reversals.

An additional consideration is the connection with the rest of the Asia-Pacific session. A surprise can ripple to NZD, JPY crosses, and other pairs, creating correlated moves.

How does the system handle the first Tuesday of the month?