Mixed minutes mean muted currency reaction

Australian Dollar:

The Australian Dollar enjoyed a mixed session throughout trade on Tuesday recouping losses suffered in the wake of the RBA’s monthly meeting minutes as Greenback profit taking took hold. The AUD edged lower during the domestic session as the Reserve Banks April meeting minutes hinted at additional interest rate cuts ahead. Touching intraday lows of 0.7682 the Aussie found support as the minutes were absorb and traders noted the board’s reluctance to move to quickly citing “the responsiveness of borrowers and savers to changes in interest rate was and is unusually uncertain”. The comments highlighted the Banks caution in prematurely pulling the monetary policy trigger and leaving itself without the ammunition to combat further economic stagnation. All eyes now turn to today’s quarterly inflation report where a stable print should offer support and help hold onto recent ranges.  

• We expect a range today of 0.7580 – 0.7850

New Zealand Dollar:

Like many of its major currency counterparts the New Zealand dollar edged upward against the U.S dollar through trade on Tuesday buoyed by profit taking in a market void of headline data events. Touching intraday highs of 0.7712 the domestic economic docket is again free of meaningful macroeconomic indicators and attentions will be squarely focused on Australia’s quarterly inflation report. A soft read may supply the catalyst to push the NZD through parity for the first time since the currency was floated in 1985.

• We expect a range today of 0.7580 – 0.7780

Great British Pound:

The Great British Pound edged upward through trade on Tuesday as investors took profit on Greenback gains in an illiquid session void of headline data. Rallying strongly last week Sterling looked poised to make a break above 1.50 but a string of mixed data sets throughout the 4th quarter, an extended cycle of neutral monetary policy and uncertainty surround the upcoming May 7th elections quashed any meaningful push. Opening Australasian trade buying 1.4921 US cents attentions now turn to today’s Bank of England MPC meeting minutes for further direction and guidance.

• We expect a range today of 1.9120 – 1.9520 

Majors:

The U.S Dollar enjoyed a mixed session Tuesday with choppy trading caused by shifts in range bound US Treasury yields and easing Greek debt concerns. The Euro managed to recoup short term losses moving back through the 1.0750 handle after Eurogroup ministers agreed to move away from imposing a fixed deadline on Greek reform. Having pledged a list of comprehensive reforms would be ready by the end of April it is looking increasingly unlikely the Syriza government will be able to deliver. Greece is fast running out of cash and suggestions of a default and cash crunch continue to escalate. Market concerns were somewhat eased through Tuesday as it appears a compromise will be reached and is simply a matter of when and not if finance minister will come to an agreement. With little on the Economic Docket direction will again be driven by commentary from central bankers and the unfolding Greek credit crunch with concerns surrounding suggestions the ECB will demand/increase insurance on Emergency Greek funding.  

Data releases:

• AUD: CPI q/q and Trimmed Mean CPI q/q
• NZD: No Data
• JPY: Trade Balance
• GBP: MPC Official Bank Rate and Asset Purchase Facility Votes
• EUR: Italian Retail Sales and Consumer Confidence
• USD: HPI m/m, Existing Home Sales and Crude Oil Inventories