RBA Minutes weigh on the Aussie

Australian Dollar:

Having opened at a rate of 0.9330 when valued against its US Counterpart that’s as good as is it got for the Australian dollar yesterday which managed to accumulate losses worth 1 US Cent. Dropping below the 93 US cents mark reaching a two week low of 0.9240 the main catalyst for its drop yesterday came after the release of minutes for the Reserve Banks most recent meeting which revealed a relatively dovish outlook for the domestic economy. Highlighting that growth over the coming quarters is expected to be below trend given slower growth in exports the mood was further dampened following comments from the RBA’s Guy Debelle who said the Australian dollar is likely to fall further in line with an overall drop in foreign capital flows into the country. In what has been a turbulent 24 hour period the Australian dollar opens this morning spot on its overnight low at 0.9240.

• We expect a range today of 0.9210 – 0.9280

New Zealand Dollar:

The New Zealand dollar has come under some solid selling pressure overnight dragged lower by a combination of factors, not helped by a broad based sell-off across US equity markets as well as softness in commodity prices which saw Iron Ore drop below $100 for the first time since Sept 2012. Bottoming out this morning at a rate of 0.8559 when valued against its US Counterpart the outlook for global growth has been far from impressive during the early parts of this week with tonight’s focus set to be the US Federal Reserve ahead of the expected release of minutes from their most recent meeting.

• We expect a range today of 0.8530 – 0.8600

Great British Pound:

The Great British received a boost overnight after figures revealed UK inflation accelerated last month. With prices increasing from 1.6 to 1.8 percent during the month of April the move higher has been explained by the Easter break and accompanying travel period. Whilst last night’s result does see inflation remain below the BOE”s inflation target of 2 percent, the rise will do little to concern Govern Mark Carney who believes the upside of inflation will be limited given the strength of the currency. Opening stronger against the Greenback this morning at a rate of 1.6835 the Sterling is also stronger against both the Aussie 1.8217 and the Kiwi 1.9639.

• We expect a range today of 1.8180 – 1.8250

Majors:

US Stocks fell in a broad based sell-off overnight dragging the US dollar lower against the Japanese Yen for a fifth straight session. In a continuation of the recent trend in which investors have shifted funds away from equities and back into the bond market, yields on US treasuries have continued their slide. Whilst it has been a relatively quiet start to the week already markets are gearing up for a raft of US Monetary Policy Rhetoric which is expected this evening. In comments made overnight by New York Federal Reserve President William Dudley he believes the current pace of monetary tightening will remain relatively slow, the type of outlook which will only further delay any potential upside for the US dollar. Weaker against the Yen this morning at a rate of 101.309, the Euro is steady at 1.3700.

Data releases

• AUD: Westpac Consumer Sentiment, Wage Price Index q/q
• NZD: No data today
• JPY: Monetary Policy Statement, BOJ Press Conference
• GBP: MPC Asset Purchase Facility Votes, MPC Official Bank Rate Votes, Retail Sales m/m
• EUR: Current Account, German 10-y Bond Auction
• USD: FOMC Member Dudley Speaks, Fed Chair Yellen Speaks, FOMC Member Kocherlakota Speaks, FOMC Meeting minutes