Australian Dollar Steady After RBA Holds Rates
AUD
The Australian Dollar opens slightly higher against the majors this morning following yesterday’s cash rate decision, where the RBA unanimously voted to keep rates on hold at 4.35%. RBA Governor Bullock maintained a hawkish stance, emphasizing that inflation was still the main focus for them and that they were not ruling out raising rates again if needed. Asian equities ended mixed yesterday with the Nikkei +2.1%, Hang Seng -1.1% and the Shenzhen -0.8%. The ASX 200 closed +0.2% as the energy and healthcare sectors led the pack. The economic calendar is looking light for the Aussie, with no major releases today and for the rest of the week, with Michelle Bullock testifying before the House of Representatives on Friday being our next publication.
USD
AUDUSD opens relatively flat this morning at 0.7063 after a muted to reaction to the hawkish tone of the Reserve Bank of Australia. Little in the way of meaningful US data overnight with limited reaction seen to Existing Home Sales for July, falling 1.7% to 4.06M against expectations of a 1.0% decline to 4.05M. US stocks lost ground in a quieter session ahead of inflation data with the Nasdaq closing -0.6%, the S&P 500 -0.4%, and the Dow Jones -0.3%. Data wise for the US, CPI for July is set to be released tonight. Both headline and core CPI are expected to rise by +0.2% m/m. In June, both measures decelerated sharply, with headline inflation contracting by -0.4% m/m and the core figure coming in flat. The release will be a key input in shaping expectations ahead of the FOMC's September policy decision. Geopolitically, there also appears to be more pessimism amongst investors about the likelihood of the Strait of Hormuz reopening soon, and ongoing doubts about whether the US and Iran can reach a broader resolution to their almost six-month war.
EUR
AUDEUR opens slightly higher this morning at 0.6119 after an uneventful day out of the Eurozone with only Italian Trade Balance releasing, and coming in lower than expected at 4.23B from the forecasts of 4.74B. European equities were mixed in the close with the DAX +0.3%, and the CAC -0.1%. Little in the way of Eurozone data today with only German Final CPI m/m, and possibly German 30-y Bond Auction set as tentative, both are not expected to move markets.
GBP
AUDGBP opens flat this morning at 0.5228 following a quiet day data-wise out of the UK, with only BRC Retail Sales Monitor y/y releasing lower than forecasted at 1.0%. UK equities closed in the red with the FTSE -0.2%. It will be another quiet day for the UK, however tomorrow will be their main event release for the week with their GDP m/m which is forecasted to drop from 0.1% to 0%.
NZD
AUDNZD opens higher this morning regaining the 1.2 handle at 1.2011. Nothing from our Kiwi neighbours yesterday and today, however tomorrow they will be releasing their Inflation Expectations q/q with no current forecasts. Some minor data out on Friday to close out the week for New Zealand.