Yahoo Finance The RBA Pins back the Aussie as the Focus Shifts to the Pound
Earlier in the Day:
There were no material stats released through the Asian session this morning, leaving the news wires and risk sentiment to continue to drive the markets through the early part of the day.
While there were no material stats, the RBA released its monetary policy meeting minutes from 5th February’s meeting, which had delivered a more dovish statement than the markets had anticipated.
For the Aussie Dollar,
The RBA monetary policy meeting minutes included the following salient points:
Trade tensions were a material risk to the outlook for global growth.
Downside risk to the global economy had increased.
Mining investment is expected to begin contributing to growth after being a drag over the last 6 years.
The outlook for domestic consumption was uncertain, attributed to falling house prices and weak retail sales growth.
House prices have fallen by around 8%, after having risen by around 50% r to a peak in September 2017.
Growth in China had slowed more than the most recent GDP numbers suggested.
Members noted that it would be appropriate to hold the cash rate steady and for the Bank to be a source of stability and confidence.
Members also noted that the probability of increasing or decreasing the cash rate was more evenly balanced. Over the preceding year, an increase in the cash rate had been more likely.
The Aussie Dollar moved from $0.71288 to $0.71206 upon release of the minutes. At the time of writing, the Aussie Dollar stood at $0.7113, down 0.24% for the session.
Elsewhere,
The Kiwi Dollar stood at $0.6833 at the time of writing, a loss of 0.22% for the morning. The Japanese Yen was flat at ¥110.62, against the Dollar. The Yen gave up early gains following some dovish comments from BoJ Governor Kuroda early on in the day. The BoJ Governor had spoken in Parliament stating that further monetary policy easing would be delivered if deemed necessary.
The Day Ahead:
For the EUR
Following a quiet start to the week, on the data front, February economic sentiment figures out of Germany and the Eurozone will be in focus later this morning.
The focus will be on Germany’s economic sentiment figure that is forecast to be EUR negative. Concerns over the economic outlook for Germany and the Eurozone continue to pin the EUR back and today’s figure will provide further color ahead of Thursday’s private sector PMI numbers.
Outside of the political arena, sentiment towards the U.S – China trade talks will influence risk sentiment through the day.
At the time of writing, the EUR up by 0.10% at $1.1300.
For the Pound
Economic data scheduled for release include December’s average earnings figures and the unemployment rate, which will be released alongside February’s claimant count figures.
While any shift in the unemployment rate will influence, the focus will be on average earnings and claimant count numbers. Economic data out of the UK has been mixed of late, but with Brexit continuing to leave the markets uncertain over what lies ahead, downside figures will likely have more of a lasting impact than positive numbers.
Outside of the stats, Brexit chatter will need to be monitored through the day.
At the time of writing, the Pound was down by 0.15% at $1.2905.
Across the Pond
There are no material stats scheduled for release, leaving the focus on Capitol Hill and Beijing. Updates from the Oval Office and Beijing on trade talks will be a key influence, while chatter from Congress about the ”Wall” and the state of emergency source of funding will also be a consideration.
Economic data out of the U.S was disappointing last week, putting the Dollar on the back foot. FOMC member Mester, scheduled to speak this afternoon, could put more pressure on should there be any suggestions of the FED needing to hold rates steady through the year.
At the time of writing, the Dollar Spot Index was up by 0.01% to 96.912.
For the Loonie
As the markets reopen following Monday’s holiday, risk sentiment and influence on crude oil prices will provide direction through the day. There are no material stats scheduled for release to impact.
The Loonie was down by 0.13% to C$1.3257, against the U.S Dollar, at the time of writing.
This article was originally posted on FX Empire
