Aussie holds above 0.7 despite resurgent Greenback
|AUD - Australian Dollar
The Greenback enjoyed moderate gains across the board overnight as US data surprised to the upside despite Fed Chair Powell reiterating the risks to the outlook. Within this context, the Aussie faltered and slipped to open this morning at 0.7010 after enjoying a mostly positive Asian session earlier in the day, reaching highs of around 0.7045. It wasn’t an entirely quiet day domestically though with the RBA meeting minutes on Tuesday providing a peek into the RBA’s near-term ideology. Unsurprisingly, the RBA double downed on its previous rhetoric and highlighted its focus on the labour market. The RBA also interestingly kept the door open for further rate cuts if required although noted that it wasn’t an imminent scenario and much depends on the labour market.
The Australian Dollar is now set to enjoy a quiet day on the domestic economic calendar with little to digest. All eyes will however look to the UK where their CPI reading is due for release later this evening.
Key Movers
The United States Dollar was the strongest performer overnight and enjoyed broad based gains against a number of counterparties. Well supported by domestic data, the US DXY surged 0.46% to reach 97.38 against a basket of currencies despite Fed Chair Powell reiterating the risks to the outlook. The Greenback found its support from domestic data which were certainly on the stronger side. US Retail Sales led the way with a surprising, positive result above expectations and the data also suggests that real consumer spending bounced back over the quarter. Industrial Production was however, relatively flat but the NAHB housing market index continued to trend higher. Overall, some of the components of GDP strengthened considerably overnight and saw upward revisions of annual GDP estimates.
Within this context, the case for interest rate reductions by the Fed have been undermined but Fed Chair Powell nevertheless kept the door open for further rate cuts. Speaking in Paris, Fed Chair Powell reiterated his message from last week and commented that the Fed is carefully monitoring the downside risks to US growth and will act appropriately to sustain expansion.
Expected Ranges
AUD/CAD: 0.9124 - 0.9226 ▼
AUD/EUR: 0.6214 - 0.6295 ▲
GBP/AUD: 1.7624 - 1.7756 ▼
AUD/NZD: 1.0423 - 1.0503 ▼
AUD/USD: 0.6978 - 0.7049 ▲
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.