AUD/USD approached its 100DMA to the upside at 0.9327

EUR/USD

With no tier 1 data for the session or notable speakers on the schedule, today was a particularly subdued session for the pair. Despite Moody’s upgrading the Greek sovereign debt rating to Caa1 from Caa3 and markets responding positively to the news that Banco Espirito Santo is to be split into ‘good’ and ‘bad’ banks in a EUR 4.9bln rescue package, the pair was relatively unmoved throughout the session. Furthermore, the publication of a weak Eurozone Sentix Investor Confidence (M/M 2.7 vs. Exp. 9.0) also failed to provide the pair with any traction as participants look ahead to a host of key risk events including ECB, BoE, RBA and BoJ rate decisions. In terms of the ECB this week, the central bank are expected to keep policy on hold, pointing to the fact that earlier announced measures, including yet to be carried out TLTRO allotment, are yet to filter through to the real economy.

GBP/USD

From a data perspective, today’s main release for the pair came in the form of UK construction PMI (M/M 62.4 vs. Exp. 62.2), which granted the pair a modest move higher of 10 pips but ultimately failed to provide the pair with any sustained reaction. In terms of economic commentary, much of the rhetoric over the weekend and likely for the remainder of the week is set to centre around Thursday’s BoE rate decision. Over the weekend, reports in the Sunday Times suggested that this week's MPC meeting could see a potential rate hike vote by McCafferty and Weale which would be the first vote for a rate increase since June 2011. However, expectations are for the BoE to stand pat on their monetary policy and keep rates on hold and any vote against doing so would not be revealed until the minutes publication later in the month. Furthermore, attention is likely to be placed more on the BoE’s Quarterly Inflation Report which is due to be published next week.

AUD/USD

Overnight, AUD strengthened against its peers after better than expected Australian June retail sales (0.6% vs. Exp. 0.3%); the biggest jump since January 2014, which led AUD/USD to move off its session lows seen just above the 0.9300 level. This upward trend was observed throughout the session as the USD index traded in a relatively rangebound manner, while RANsquawk sources reported talk of leveraged names buying in AUD as AUD/USD approached its 100DMA to the upside at 0.9327. Looking ahead, focus for the pair now turns towards the RBA rate decision overnight where the central bank are expected to keep their cash rate on hold at 2.50%. Rhetoric from the central bank continues to signal the central bank is to remain on hold for the near-term with the minutes from last month’s meeting stating that the most prudent course is likely a period of stable rates.