RBA policy meeting offers little incentive to break current trading range

OzForex Research OzForex Foreign Exchange

AUD - Australian Dollar

The Australian dollar crept through 0.7750 on Tuesday, moving marginally higher on the day in what was otherwise a largely lacklustre trading session. Price action across majors was muted despite a deluge of macroeconomic indicators and uptick in key commodity prices. Analysts largely ignored the RBA’s rate statement after officials unsurprisingly left rates on hold and failed to offer any insight into amendments in the current quantitative easing program. While edits to the RBA’s rhetoric were mostly positive, investors appeared reluctant in extending gains beyond resistance at 0.7770 ahead of a key macroeconomic data prints. The Australian dollar remains firmly range bound and unlikely to shift outside the current handle without a significant shift in the underlying risk narrative. Our attentions turn to today’s quarterly GDP print and Friday’s US non-farm payroll data as key markers of direction into the weekend. Anything short of a shock under or over performance is unlikely to prompt a significant shift in direction.

Key Movers

Price action across currency markets was largely muted on Tuesday, with the USD, EUR and JPY all flat. The GBP was the days big underperformer, giving up 1.42 and slipping below 1.4150. Despite the UK’s best efforts to vaccinate its citizenry as quickly as possible and a slow and measured economic re-opening, the introduction of the Indian variant has sparked a fresh wave of infections across some regions sparking fears the government will be forced to slow and even roll back the plan to re-open the economy. The UK has led most countries in delivering a fast and effective vaccination program and the emergence of variants raises significant near-term concerns. Our attentions, as always, remain with the evolving pandemic while commentary from Bank of England Governor Bailey headlines the macroeconomic ticket.

Expected Ranges

AUD/USD: 0.7680 - 0.7830 ▲

AUD/EUR: 0.6290 - 0.6370 ▲

GBP/AUD: 1.8180 - 1.8420 ▼

AUD/NZD: 1.0630 - 1.0750 ▲

AUD/CAD: 0.9290 - 0.9410 ▲

Author

OzForex Research

OzForex Foreign Exchange

EUR/USD flirts with daily highs, retargets 1.1900

EUR/USD regains upside traction, returning to the 1.1880 zone and refocusing its attention to the key 1.1900 barrier. The pair’s slight gains comes against the backdrop of a humble decline in the US Dollar as investors continue to assess the latest US CPI readings and the potential Fed’s rate path.

GBP/USD remains well bid around 1.3650

GBP/USD maintains its upside momentum in place, hovering around daily highs near 1.3650 and setting aside part of the recent three-day drop. Cable’s improved sentiment comes on the back of the Greenback’s irresolute price action, while recent hawkish comments from the BoE’s Pill also collaborate with the uptick.

Gold clings to gains just above $5,000/oz

Gold is reclaiming part of the ground lost on Wednesday’s marked decline, as bargain-hunters keep piling up and lifting prices past the key $5,000 per troy ounce. The precious metal’s move higher is also underpinned by the slight pullback in the US Dollar and declining US Treasury yields across the curve.

Crypto Today: Bitcoin, Ethereum, XRP in choppy price action, weighed down by falling institutional interest

Bitcoin's upside remains largely constrained amid weak technicals and declining institutional interest. Ethereum trades sideways above $1,900 support with the upside capped below $2,000 amid ETF outflows.

Week ahead – Data blitz, Fed Minutes and RBNZ decision in the spotlight

US GDP and PCE inflation are main highlights, plus the Fed minutes. UK and Japan have busy calendars too with focus on CPI. Flash PMIs for February will also be doing the rounds. RBNZ meets, is unlikely to follow RBA’s hawkish path.

Ripple Price Forecast: XRP potential bottom could be in sight

Ripple edges up above the intraday low of $1.35 at the time of writing on Friday amid mixed price actions across the crypto market. The remittance token failed to hold support at $1.40 the previous day, reflecting risk-off sentiment amid a decline in retail and institutional sentiment.