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Aussie drifts lower as RBA reiterates dovish stance on monetary policy

AUD - Australian Dollar

The Australian Dollar was whittled approximately 0.3% lower overnight, opening this morning at the marginally lower level of 0.6757. As has been the norm for some time, the Aussie continues to trade on domestic issues and US-China relations which both soured slightly during the Tuesday trading session.

Kicking things off at home, the RBA released their meeting minutes which ultimately reiterated the dovish stance of the RBA. Noting that they are 'prepared to ease monetary policy further if needed' and that recent data was on the soft side, the Aussie drifted lower as the chances of further rate cuts grow less nebulous. Offshore events also took its toll on the Aussie with the optics of the US-China phase one deal making way for the reality of the agreement. Lingering concerns over how much of a deal was actually agreed have muddied the Aussie’s support. Nevertheless, despite the sour tone, the Aussie did see a slight uptick as positive Brexit news reverberated around global markets and risk sentiment returned to the market.

Moving into Wednesday, the Aussie will look off-shore for direction with Brexit making waves and US retail sales also gleaning some attention.

Key Movers

Brexit dominated attentions last night as the EU and UK look surprisingly close to a draft withdrawal agreement. Prime Minister Johnson has conceded to the EU’s demands on the Irish Border and agreed in principal that the customs border can be in the Irish Sea and thus will keep Northern Ireland within the EU customs union. While the deal looks close to being agreed there is still some major hurdles before pen gets put to paper although there is considerable momentum from both sides as everyone now wants a resolution one way or another. The Great British Pound leaped more than a cent to touch 1.2780 on the news although remains considerably volatile.

For other majors, the Greenback remains relatively flat with safe haven currencies whittled lower as risk sentiment returns to the market.

Expected Ranges

AUD/CAD: 0.8872 - 0.8942 ▼

AUD/EUR: 0.6079 - 0.6149 ▼

GBP/AUD: 1.8882 - 1.8959 ▲

AUD/NZD: 1.0689 - 1.0767 ▲

AUD/USD: 0.6719 - 0.6781 ▼