Aussie Dollar Steadies After Hawkish RBA Meeting Minutes
AUD
The Aussie Dollar opens stronger across the board this morning following yesterdays release of the latest RBA meeting minutes. Asian equities ended mixed yesterday with the Shenzhen +1.1%, Nikkei +0.9% and the Hang Seng -0.6%. The ASX 200 shed 0.5% as real estate and materials sectors led losses of -2.2% and -1.6%. Despite this local drag, the Aussie caught a strong bid from the newly released RBA Minutes, which showed the board remains highly concerned about sticky inflation. Regional sentiment was also lifted by stronger than expected Chinese business activity data, providing a nice buffer for the local currency. With no major domestic data scheduled for the rest of the week, local market movements will be guided entirely by global data and shifting political news.
USD
The AUDUSD pair opened stronger this morning at 0.6916, gaining roughly 0.5% overnight as global risk sentiment improved. US equities ended the quarter with gains (and the best quarter in 6 years for the S&P500) with the Dow up 0.3%, the Nasdaq +1.7% and the S&P500 + 0.8% for the session. Geopolitical anxieties eased slightly on news that the U.S. and Iran are scheduled to resume indirect talks in Doha. On the data front, May JOLTS job vacancies unexpectedly jumped to 7.59M (exp 7.28M), keeping Fed tightening expectations alive. The greenback faces heavy event risk tonight with newly appointed Fed Chair Kevin Warsh's first public speech, followed closely by tomorrow's critical U.S. Unemployment Rate release.
EUR
The AUDEUR pair opened stronger this morning at 0.6058, picking up 0.5% overnight. European equity markets generally closed higher, with Germany’s DAX gaining +1.5% and the CAC up +0.4%. The Euro faced some pressure after preliminary June inflation numbers out of France, Italy, and Germany all came in cooler than expected. This disinflation trend was matched by cautious comments at the ECB Sintra Forum, where officials like Philip Lane and Joachim Nagel urged patience and favored waiting until September before raising rates again. Markets heavily expect the ECB to keep rates on hold at its July meeting.
GBP
The AUDGBP pair opened stronger this morning at 0.5217, breaking back cleanly above the key 0.52 handle. Sterling found a solid floor after final GDP figures confirmed a 0.6% expansion, officially making the UK’s economy look more resilient than its current political climate reflects. London's FTSE also closed +0.1%, tracking the positive mood in Europe. The broader outlook for the Pound remains capped by political uncertainty as the UK looks for a replacement for Keir Starmer, and volatility could rise tonight when BoE Governor Andrew Bailey speaks.
NZD
The AUDNZD pair opened flat this morning at 1.2185, showing zero net movement despite the Aussie outperforming other majors overnight. The standstill reflects a well-matched policy tug-of-war, as both the RBA and the RBNZ face sticky domestic inflation. On the policy front, ANZ's economics team noted this week they now expect the RBNZ to lift the OCR toward 3.00% by year-end. With a bare domestic economic docket out of Wellington, the Kiwi remains heavily exposed to shifting geopolitical headlines.