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Aussie dollar pushes higher ahead of RBA latest meeting minutes

AUD - Australian Dollar

The Australian dollar is stronger this morning when valued against the Greenback. The Aussie reached an overnight high of 0.7039 reacting to Chinese data earlier in the day. China released second quarter Gross Domestic Product (GDP) which was confirmed at 6.2% (YoY). Real GDP expanded by 1.6% on a quarterly basis in the second quarter following the previous quarter's 1.4% reading. The weakest growth recorded since quarterly data have been published since 1992, although in line with market expectations. Yesterday we also saw the release of Chinese Retail Sales figures, up by 9.8% YoY in June, while Industrial Production in the same period rose by 6.3%, both largely surpassing the market’s expectations.

Looking ahead today and at 11.30am AEST the Reserve Bank of Australia (RBA) will release its recent Monetary Policy Meeting Minutes. Policymakers seen leaving doors open for additional cuts to the official cash rate. From a technical perspective, the AUD/USD pair is currently trading at 0.7038. We continue to expect support to hold on moves approaching 0.6995 while now any upward push will likely meet resistance around 0.7050.

Key Movers

Currency movements overall were fairly modest on Monday ahead of major central bank policy decisions next week. The U.S. Federal Reverse is expected to cut interest rates at next week’s policy meeting by 25 basis points and make another cut in September. The European Central Bank (ECB) also holds a meeting next week, with investors expecting a dovish statement. Money markets have priced in an ECB rate cut of 10 basis points in September and another one in March. The ECB’s meeting on July 25 may reinforce those expectations.

The British pound fell back towards six-month lows against the Greenback on Monday after a run of poor economic data and continued Brexit concerns. Looking ahead today in the UK and we will release of their latest employment data. The ILO unemployment rate for the three months to May is expected to remain steady at 3.8%. The number of unemployed people is expected to have decreased to 18.9K in June from 23.2K in the previous month. From a technical perspective, the GBP/USD pair is currently trading at 1.2518 . We continue to expect support to hold on moves approaching 1.2500 while now any upward push will likely meet resistance around 1.2550.

Expected Ranges

AUD/USD: 0.6930 - 0.7130 ▲

GBP/AUD: 1.7650 - 1.7850 ▼

AUD/NZD: 1.0350 - 1.0550 ▲

AUD/EUR: 0.6150 - 0.6350 ▲

AUD/CAD: 0.9050 - 0.9250 ▲