Good Morning,
Market Headlines
Markets were relatively again contained overnight with little noteworthy news. The S&P500 is up 0.3%, while the USD and bond yields are again slightly lower. Commodities, Brent crude futures rose 1.1% to $45.30, copper rose 1.5%, iron ore rose 0.6% to $121.50, while gold rose 1.9%.
Currencies
AUD/USD: 0.7172 – 0.7227
EUR/USD: 1.1829 – 1.1881
GBP/USD: 1.3074 – 1.3118
USD/JPY: 105.94 – 106.53
USD/CAD: 1.3074 – 1.3121
NZD/USD: 0.6520 – 0.6554
AUD/JPY: 76.31 – 76.61
AUD/NZD: 1.0980 – 1.1026
AUD Thoughts
- AUD/USD marks second U-turn from 0.7220-30 area after flashing two-day winning streak.
- Broad US dollar weakness, gold price rally favour the Aussie buyers.
- Worries concerning the US-China tussle, American stimulus largely ignored.
- RBA minutes will offer more details on the central bank’s recent dovish tone.
Looking forward, RBA minutes will be the key for the AUD/USD as the Aussie central bank’s latest dovish tone needs justifications. The RBA kept its benchmark unchanged while adding to Quantitative Easing (QE) in its latest meeting. The RBA Governor has recently been favouring negative rates but steps back from acting too soon. Hence, pessimism among the policymakers, if revealed, could stop the quote from rising further beyond the latest highs. However, any surprise optimism might not refrain from refreshing the 22-month top close to 0.7245.
Unless crossing 0.7240-45 area, AUD/USD prices become vulnerable to revisit 0.7200 mark, a break of which will in turn drag the quote to 21-day SMA surrounding 0.7160. On the contrary, the pair’s ability to cross 0.7245 enables the bulls to attack the year 2019 top near 0.7300.
Event Risk Data Today
AU – RBA Minutes
US – July housing starts and building permits