The US Dollar looks to April’s service-sector ISM data to inform Fed policy speculation. The Australian Dollar rose despite an RBA interest rate cut.
Talking Points:
Aussie Dollar Gains Despite RBA Rate Cut Amid Fading Further EasingBets
US Dollar Looks to Service-Sector ISM Figures to Inform Fed Rate Outlook
See Economic Releases Directly on Your Charts with the DailyFX News App
The Australian Dollar traded higher following a policy announcement from the Reserve Bank of Australia. While policymakers cut the benchmark interest rate to a record-low 2 percent as widely expected, the accompanying policy statement struck an upbeat tone that seemed to lower the probability of further easing in the near term.
Governor Glenn Stevens and company specifically cited “improved trends in household demand over the past six months and stronger growth in employment”. The decision to cut was chalked up to the forgiving inflation outlook, which the central bank said “provided the opportunity…to reinforce recent encouraging trends”.The Aussie rose alongside front-end bond yields, speaking to the announcement’s supportive impact on policy bets.
A quiet economic calendar in European trading hours may see the markets waiting for April’s ISM Non-manufacturing Composite reading as the next significant intraday inflection point. The data is expected to show that service-sector activity growth decelerated last month, registering at the weakest pace since May 2014. A soft print may encourage bets on a relatively later arrival of the first post-QE Fed interest rate hike and weigh on the US Dollar, although follow-through may be short-lived as Friday’s Employment report looms large.
FXCM, L.L.C.® assumes no responsibility for errors, inaccuracies or omissions in these materials. FXCM, L.L.C.® does not warrant the accuracy or completeness of the information, text, graphics, links or other items contained within these materials. FXCM, L.L.C.® shall not be liable for any special, indirect, incidental, or consequential damages, including without limitation losses, lost revenues, or lost profits that may result from these materials. Opinions and estimates constitute our judgment and are subject to change without notice. Past performance is not indicative of future results.
Recommended Content
Editors’ Picks
EUR/USD stays near 1.0750 following Monday's indecisive action
EUR/USD continues to fluctuate in a tight channel at around 1.0750 after posting small gains on Monday. Disappointing Factory Orders data from Germany limits the Euro's gains as investors keep a close eye on comments from central bankers.
GBP/USD retreats below 1.2550 as USD recovers
GBP/USD stays under modest bearish pressure and trades below 1.2550 in the European session on Tuesday. The cautious market stance helps the USD hold its ground and doesn't allow the pair to regain its traction. The Bank of England will announce policy decisions on Thursday.
Gold price turns red below $2,320 amid renewed US dollar demand
Gold trades in negative territory below $2,320 as the souring mood allows the USD to find demand on Tuesday. Nevertheless, the benchmark 10-year US Treasury bond yield stays below 4.5% and helps XAU/USD limit its losses.
Bitcoin miner Marathon Digital stock gains ground after listing by S&P Global
Following Bitcoin miner Marathon Digital's inclusion as an upcoming member of the S&P SmallCap 600, the company's stock received an 18% boost, accompanied by an $800 million rise in market cap.
The impact of economic indicators and global dynamics on the US Dollar
Recent labor market data suggest a cooling economy. The disappointing job creation and rising unemployment hint at a slackening demand for labor, which, coupled with subdued wage growth, could signal a slower economic trajectory.