AUD - Australian Dollar
Tuesday's trading session initially saw the Aussie come under selling pressure as intraday domestic releases undermined any positivity the market may have had for the Aussie. Fortunately for the Australian Dollar, there were some developments internationally that saw the Aussie recover to open this morning at 0.6875. The Aussie started the day at a fresh 5.5 month at 0.6841 after the RBA minutes confirmed what much of the market was thinking; that multiple rate cuts this year are well and truly on the table. The meeting minutes dovish sentiment is best summed up in a quote from the report: “Given the amount of spare capacity in the labor market and the economy more broadly, members agreed that it was more likely than not that a further easing in monetary policy would be appropriate in the period ahead,”. Adding fuel to the fire was the release of the Australia first quarter home price index which saw a larger than expected fall of -3% which only dampened any attempt of an Aussie recovery for the session.
Despite the poor domestic docket the Aussie did find its feet when ECB President Mario Draghi released a notably dovish statement in Sintra that suggested another cash rate cut may be in the future for the Eurozone. The prospect of additional stimulus in the Eurozone had an immediate effect on risk assets with the Aussie no exception. Adding to the shift in risk sentiment was President Trump confirming that he will meet President Xi later this month.
Moving into Wednesday, the Aussie enjoys a quiet domestic docket but an important international economic calendar with the US FOMC set to release their cash rate decision. Additionally, the Federal Reserve will also release their accompanying statement which may contain some crucial clues for the direction the worlds largest economy is looking to take.
Volatility was muted moving into Wednesday but there was certainly some action from the Euro and Japanese Yen.
European Central Bank President Mario Draghi kicked things off during the European Tuesday session with a notably dovish statement in Sintra that suggested another cash rate cut may be in the future for the Eurozone. The Euro fell 0.28% against the Greenback on the news but managed to rebound significantly on the report that Trump and Xi will meet. Ultimately, the end result was a volatile ride for very little change from yesterdays’ open.
It wasn't all going the way of the Greenback however as it shed 0.28% against the Japanese Yen, a global favourite for the title of safe haven. Risk sentiment, while aided by the ECB, still saw the USD lose ground to the Japanese Yen ahead of the key FOMC releases early on Thursday morning. Risk sentiment remarkably reversed course early this morning however with the rebound again due to news of Trump and Xi’s upcoming meeting to ultimately post very little change.
0.9146 - 0.9237 ▼AUD/EUR:
0.6101 - 0.6182 ▼GBP/AUD:
1.8229 - 1.8291 ▼AUD/NZD:
1.0502 - 1.0564 ▼AUD/USD:
0.6836 - 0.6905 ▼