Aussie Dollar Slides After RBA Pause
AUD
The Aussie dollar loses its momentum against the majors overnight after the RBA left the cash rate unchanged at 4.10%. The RBA’S language in yesterday’s statement seems to indicate a firmer view that growth will be weak for a period of time. Market pricing now shows the probability of another hike by early 2024 has been reduced from around 90% to 55%, with the possibility of another hike in November this year to 4.35%. On to equities the Nikkei was up 0.9%, Shanghai Comp flat at 0.0%, and ASX was up 0.5% off of the back of the IT sector. No news out of Australia today, however tomorrow we have our Trade Balance, and the Caixin Services PMI out of China.
USD
The Aussie has fallen against the Greenback to open lower at 0.6618 after what was the biggest single day decline since March. The Greenback advanced against the Aussie yesterday after the RBA left cash rates unchanged, alongside relatively solid data out of the US with ISM Manufacturing PMI and Construction in June, which was offset by a decline in job openings (JOLTS) last month to the lowers level in more than two years. Much like the news out the US, Wallstreet had a mixed session seeing the NASDAQ close -0.4%, The S&P 500 -0.2%, and the Dow Jones up 0.2%. Tonight, we'll see ADP Non-Farm Employment Change and Crude Oil Inventories data.
EUR
AUDEUR loses its 0.61 handle after the taking a tumble yesterday, falling over 100bps to open at 0.6007, mainly due to the RBA’S cash rate decision, alongside a myriad of stronger-than-expected Eurozone manufacturing PMI releases. European equities on the other hand were mostly down with the CAC -1.2%, and the DAX -1.3%. A quiet day on the news front for the Eurozone with only the Spanish Unemployment Change being released later this evening.
GBP
The AUDGBP has given back recent gains to open at 0.5168 off the back of yesterday's RBA cash rate pause, while the FTSE closed down -0.4%. Quiet day on the news front today, however, tomorrow night we have the BOE Monetary Policy Report, MPC Official Bank Rate Votes, Monetary Policy Summary, Official Bank Rate and BOE Gov Bailey Speaks to look out for. Following the surprise 50bps hike in June, the BoE is generally expected to revert to a smaller 25bps bump tomorrow, which would take the rate to 5.25%. Crucially, both headline and core inflation have decelerated, although remain nowhere near the 2 to 3% target.
NZD
AUDNZD loses its 1.08 handle again, opening lower this morning at 1.0775. A busy morning today for our Kiwi neighbours with the release of the Employment Change q/q which came through better than expected at 1.0% while the Unemployment Rate edged up 0.1% to 3.6%. No further news set to be released today, however tomorrow we have the ANZ Commodity Prices m/m.