AUD holds firms as FOMC minutes offer little insight


Australian Dollar:

The Australian Dollar opens marginally higher this morning having held a tight trading range throughout Wednesday’s session. Westpac’s consumer confidence report failed to break market expectations while Chinese inflation data was marginally below that of analyst consensus and with minimal insight into forward guidance offered within the Federal Reserve’s Open Market Committee June minutes investors had little to drive strong price action. Instead markets looked to higher yielding assets and the AUD found support and drove back through 0.94 having bounced to an intraday low of 0.9388 in the lead up to the FOMC minute release. We turn now to labour market data and today’s unemployment rate for further direction and guidance.

  • We expect a range today between 0.9330 – 0.9480


New Zealand Dollar:

The push toward post float highs continued yesterday as the New Zealand Dollar drove higher.

The local economic calendar was free of headline data and the Kiwi was left to off shore vices for direction taking advantage of carry trades and demand for the higher yielding asset. With little offered within the US Federal Reserve’s Open Market Committee meeting minutes to stimulate speculation of an early interest rate hike in the world’s largest economy markets demand for the USD and its denominated assets waned and the NZD pushed to an intraday high of 0.8829. Moving forward todays docket is again quiet with investors looking offshore for a catalyst to push the currency through its record peak of 0.8843 set in August 2011. 

  • We expect a range today between 0.8740 – 0.8880 

 

Great British Pound:

The Great British Pound opens higher this morning and recouped the losses suffered early this week. A quiet local economic calendar meant market focus was solely on the US Fed Reserves June meeting minutes. With few surprises and little forward insight offered investors sold off USD and the late hawkish tone spouted BoE officials meant Sterling became a benefactor forcing cable back through 1.7150 having dipped below 1.71 in the lead up to the FOMC minutes release. Attention now turns to the Bank of England and its Monetary Policy Committee (MPC) as it announces the official bank rate. With expectations rates will be left un-tampered the primary focus will be fixed on the accompanying rate statement for a developing hawkish signal.

  • We expect a range today between 1.8180 – 1.8300 

 

Majors:

The U.S Dollar has again moved lower against the majority of its major currency counterparts as the Fed’s Open Market Committee minutes offered little to encourage an early hike in interest rates. Maintaining a downbeat tone the Fed’s statement was absent of any major surprises and while many analysts expected the dovish note there was some speculation that the committee’s more hawkish members would put pressure on the board to consider an early adjustment of monetary policy. The Central Banks refusal to offer extended insight into its near term thinking have hurt the Greenback. When combined with a string of inconsistent data and softer growth forecasts investors wary of supporting any far-reaching USD rally.

The Euro opens higher against its US counterpart as investors sold down the Greenback. ECB President Mario Draghi suggested the Central Bank was ready to use “unconventional instruments” if needed. The suggestion that large scale asset buying is on the table was not unexpected as the ECB prepares to stimulate growth within the 18 nation block.

Attention now turns to US unemployment claims as the headline ticket moving into the weekly close.  

 

Data releases

  • AUD: Employment Change, Unemployment Rate and MI Inflation Expectations   
  • NZD: Business Manufacturing Index
  • JPY: Core Machine Orders, Tertiary Industry Activity, 30 Year Bond Auction and Consumer Confidence.
  • GBP: Trade Balance, Official Bank Rate, MPC Rate Statement and Asset Purchase Facility
  • EUR: French Industrial Production, French CPI, Italian Industrial Production and ECB Monthly Bulletin.
  • USD: Unemployment Claims, Wholesale Inventories, 30 Year Bond Auction and FOMC Member Fischer Speaks. 

Recommended Content


Recommended Content

Editors’ Picks

USD/JPY pops and drops on BoJ's expected hold

USD/JPY pops and drops on BoJ's expected hold

USD/JPY reverses a knee-jerk spike to 142.80 and returns to the red below 142.50 after the Bank of Japan announced on Friday that it maintained the short-term rate target in the range of 0.15%-0.25%, as widely expected. Governor Ueda's press conference is next in focus.  

USD/JPY News
AUD/USD bears attack 0.6800 amid PBOC's status-quo, cautious mood

AUD/USD bears attack 0.6800 amid PBOC's status-quo, cautious mood

AUD/USD attacks 0.6800 in Friday's Asian trading, extending its gradual retreat after the PBOC unexpectedly left mortgage lending rates unchanged in September. A cautious market mood also adds to the weight on the Aussie. Fedspeak eyed. 

AUD/USD News
Gold consolidates near record high, bullish potential seems intact

Gold consolidates near record high, bullish potential seems intact

Gold price regained positive traction on Thursday and rallied back closer to the all-time peak touched the previous day in reaction to the Federal Reserve's decision to start the policy easing cycle with an oversized rate cut.

Gold News
Ethereum rallies over 6% following decision to split Pectra upgrade into two phases

Ethereum rallies over 6% following decision to split Pectra upgrade into two phases

In its Consensus Layer Call on Thursday, Ethereum developers decided to split the upcoming Pectra upgrade into two batches. The decision follows concerns about potential risks in shipping the previously approved series of Ethereum improvement proposals.

Read more
Bank of Japan set to keep rates on hold after July’s hike shocked markets

Bank of Japan set to keep rates on hold after July’s hike shocked markets

The Bank of Japan is expected to keep its short-term interest rate target between 0.15% and 0.25% on Friday, following the conclusion of its two-day monetary policy review. The decision is set to be announced during the early Asian session. 

Read more
Moneta Markets review 2024: All you need to know

Moneta Markets review 2024: All you need to know

VERIFIED In this review, the FXStreet team provides an independent and thorough analysis based on direct testing and real experiences with Moneta Markets – an excellent broker for novice to intermediate forex traders who want to broaden their knowledge base.

Read More

Majors

Cryptocurrencies

Signatures