AUD Holds Gains Ahead of CPI Today
AUD
The AUD opens the day flat against the majors, with the Aussie Dollar keeping in line with the rhetoric released in the RBA’s Meeting Minutes yesterday. Asian equities saw a small decline, with both the ASX and the SHANGHAI COMP closed down 0.4%. Commodities were mixed, with Crude Oil closing down 2.3%, Gas down 0.6%, Gold up 0.2%, Silver up 0.1%, Iron Ore up 0.7% and Copper down -0.1%. The RBA Monetary Policy Meeting Minutes were released yesterday, saying the decision to cut the cash rate at the start of the month was based on the fact that financial conditions had eased and were in line with historical trends, while the labor market showed signs of remaining tight despite a slight increase in the unemployment rate. The board's forecasts indicate a gradual pickup in GDP growth over the rest of 2025, with inflation expected to return sustainably to the midpoint of the 2-3 percent target range, and the labor market to remain near balance, contingent on further, measured reductions in the cash rate. Notably, the RBA warned quicker rate cuts could be needed if the labour market nears equilibrium and inflation lags. Today at 11:30am, we will see the data event of the week occurring, the CPI y/y, expected to increase to 2.3% from 1.9%, largely driven by the expected unwinding of temporary government-mandated electricity rebates. This is a significant factor because these rebates had been pushing down headline inflation.
USD
The AUD/USD sees marginal gains, opening at 0.6495, with the pair dipping yesterday morning, regaining in the afternoon off the weak Consumer Confidence released. It dropped from 98.7 to 97.4, with many people worried about the Federal Reserve’s independence, and still unsure with tariffs, waiting for them to play out. Richmond Manufacturing Index rose to -7 from -20, better then the expected 11. Wall Street had mild success into the close, with the DOW JONES closing up 0.3%, S&P 500 up 0.2% and NASDAQ up 0.4%. Looking forward, it will be a quiet night, with FOMC member Barkin speaking, but it is expected to have little effect.
EUR
The AUD/EUR opens the day flat, with the pair keeping natural and holding onto recent gains, opening this morning at 0.5577. European equities finished the day in the red, with the DAX closing down 0.5% and the CAC finished down 1.7%. There was no data out of the Eurozone yesterday, with the remainder of the week being light as well. This afternoon will have the German GfK Consumer Climate, expected to remain at -21.5.
GBP
The AUD/GBP also opens the day flat, keeping very natural in the past 24 hours, opening this morning at a rate of 0.4817. British equities finished the day down, with the FTSE closing down 0.6%. BRC Shop Index y/y came in higher, as expected at 0.9%, previously at 0.7%. MPC member Mann Spoke in a panel in Mexico, not impacting markets. Tonight, we will see the last of the data for the week with the CBI Realized Sales, expected to improve from -43 to -26.
NZD
The AUD/NZD opens the day flat, with the pair rallying early yesterday morning, piercing the 1.1100 barrier, hitting a 5-month high, opening this morning at 1.1084. There was no data out yesterday and there will be none out today.