Greenback Steady as Rate Cut Odds Rise

AUD

Minimal data overnight saw AUD trade mostly flat against most majors, up a tad against the NZD. Australian currency appears to be holding still relative to global currencies as the markets anticipate this month's Reserve Bank of Australia interest rate decision. Markets currently price in a 95% chance of a 25bps interest rate cut to 3.60% on August 12, as recent CPI data indicates a slowdown in core inflation landing at 2.7% for June. Asian equities finished higher yesterday, with the Shenzhen +0.8%, Hang Seng +0.7% and Nikkei +0.6%. Locally the ASX climbed +1.2%, led by the consumer discretionary and financials sectors at +1.8% and +1.5%. Thursday 11:30am will see Australian Goods Trade Balance data released for the previous month, with four of the last five month-on-month forecasts falling shorter than expected, eyes will be turned to see the global impact on trade tariffs on the Australian international import and export activity.
 

USD

AUD/USD trades flat, opening at 0.6474. Unwelcome US data saw Wall St. fell overnight with the Nasdaq closing -0.7%, the S&P500 -0.5%, and the Dow Jones -0.1%. Overnight saw the release ISM Services PMI data at 50.1, lower than the 51.5 forecasted and lower again compared to the previous month. The survey indicated both business activity and employment are cooling. Prices remain elevated due to tariffs, but markets don't see inflation pressures being sustained, with 90%+ odds of a September Fed rate cut currently priced in. The USD also strengthened a little following the Fed Member Kugler's resignation. Debate has ensued whether the new Governor pick may be used by Trump to succeed current Fed chair Jerome Powell and allow Trump to gain more influence on US monetary policy. Little US data ahead of Unemployment Claims, tomorrow evening.
 

EUR

AUD/EUR opens flat at 0.5590. The DAX gained +0.4% while the CAC fell -0.1%. Today we will see German Factory orders month-on-month with expected forecast of 1.2% with the previous month's forecast having fell in lower at -1.4%. Interest is present whether ongoing tariff pressures sink into production and trade export. This is followed by Italian Industrial production month-on-month forecasted 0.4%, last month at -0.7% and finally Euro Retail Sales m/m forecasted 0.4% against last month's -0.7%. The stage is set to see whether the Eurozone is any stronger than last month or whether a trend in tariff effects is noticeable. Furthermore, the Trump Administration warns Europe of a 35% tariff if they fail to fulfill commitments highlighting an urgent sense for successful negotiations.
 

GBP

AUD/GBP wakes up to a flat market at 0.4866. The FTSE gained +0.2%. The UK will see construction PMIs released today with not much expected change, a forecast of 48.9 against last month's 48.8. Attention is almost solely turned towards Tomorrow night's policy meeting. Prevailing sentiment is Bank of England are expected to cut interest rates by 25bps from 4.25% to 4.00%` over fears of creeping inflation pressures and a soft job market.
 

NZD

AUDNZD opens a little higher at 1.0953 despite the NZ Unemployment Rate releasing at 5.3% this morning, short of 5.4% expectations. The quarterly Employment Change was -0.1%, as expected. Quarterly Inflation Expectations will be released tomorrow afternoon.