RBA Consider Hold for 'Extended Period'

AUD

The Aussie Dollar opens stronger against the USD, yet a little lower against other major currencies, with yesterday's hawkish RBA Monetary Policy Meeting Minutes countered by mixed commodity performance. The Minutes indicated the RBA Board expect the Cash Rate may need to remain at 4.35% for an “extended period”, with an interest rate hike even taken into consideration at the most recent meeting. Yesterday we also saw China’s 1-year and 5-year Loan Prime Rates held steady at 3.35% and 3.85% respectively. Equities ended the day mixed with the Nikkei +1.8%, Hang Seng -0.3% and Shenzhen -0.7%. The ASX rose +0.2% with information and materials outperforming. Commodities were also mixed, with Iron Ore +0.9%, Gold +0.2%, Silver flat, Crude Oil - 0.4%, Copper -0.6% and Natural Gas taking the biggest hit at -4.9%. We will see a relatively quiet day today and tomorrow consisting of low tier data. At 10:30am today we have the Melbourne Institute Leading Index.

USD

AUDUSD opens at 5-week highs of 6746 due to the weakened USD & AUD strength off the back of yesterday's hawkish RBA Meeting Minutes. Equities closed weaker across the board with the Dow Jones -0.2%, S&P 500 - 0.2% and the NASDAQ -0.3%. There was no major US data over the past 24h. In tomorrow's early hours we'll see US Crude Oil Inventories and the FOMC Meeting Minutes. The Federal Reserve held rates (again) at their most recent meeting, with markets expecting a cut at the next meeting in mid-September. The Minutes will likely show the reasoning behind the Fed's recent pause, with any unexpected content potentially resulting in currency volatility.

EUR
AUDEUR opens slightly lower at 0.6061 after a relatively quiet night of trading which saw the pair reach 0.6078 highs. Eurozone Final CPI y/y and Final Core CPI y/y remained unchanged at 2.9% and 2.5% respectively. Europe’s equities were in the green with the DAC +0.1% and CAC +0.2. We've got another quiet day ahead. Tomorrow will be Europe's big day for the week, with Manufacturing & Services PMIs.


GBP

AUDGBP also starts the day slightly lower at 0.5174 after hitting overnight highs of 0.5178, with no data out from the UK yesterday. Equities closed in the red with the FTSE -1.0%. No meaningful data out today, however, tomorrow we will see UK’s Flash Manufacturing PMI expected to remain unchanged at 52.1 and their Flash Services PMI expected to slightly increase to 52.8 from the previous 52.5.
 

NZD

AUDNZD hit highs of 1.0973 overnight before retreating and opening at 1.0954 following strong NZ GDT Price Index figures this morning. The headline figure printed at 5.5%, up from the previous 0.5%. We saw a big spike with goods being imported into the country from NZ’s Trade Balance coming in at -963m (exp. 331m). No meaningful data today with this week's main focus on their quarterly Retail Sales figures on Friday. They are forecasted at -1.0% from the previous 0.5%.