The RBA left rates unchanged as expected, but the Australian Dollar is slightly weaker as the statement offered little fresh support for AUD buyers. Equities are broadly flat, while the US Dollar is starting to regain some strength ahead of the next major US inflation data. With Core CPI coming up, traders may be reluctant to push stocks significantly higher until they see whether inflation continues to ease.

USD/CAD is weakening further, suggesting renewed CAD strength despite the softer AUD. The move could be supported by the recent strength in oil and expectations that Canadian monetary policy may remain relatively restrictive. Gold and Silver are moving higher despite the firmer Dollar, which is notable. The metals are benefiting from their recent technical breakouts, while continued demand and geopolitical uncertainty are providing additional support.

Market talk

The key event remains US Core CPI. A softer number could quickly reverse the current Dollar strength and give equities and precious metals another boost. A stronger CPI reading, however, could strengthen the Greenback and trigger profit-taking in Gold and Silver. For now, the markets remain in a waiting pattern, with the Dollar trying to recover while metals continue to show surprising relative strength.

Tendencies in the markets

Equities positive, USD stronger, BTC weak, ETH weak, oil positive, Silver positive, Gold positive, JPY weak.

Author

Frank Walbaum

FX Strategies.Asia

Frank has been working in the TV business for several years. Acquiring his skills in Germany’s biggest broadcasting station, he then chose to work and live in Asia, which was in 2007.

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