4 Aug 2015
Aussie rallies as RBA alters AUD stance, UK construction PMI – Next in focus
FXStreet (Mumbai) - The latest Reserve Bank of Australia’s (RBA) policy statement appears to be a game changer as the AUD/USD rallied beyond 0.73 handle after the central bank left rates unchanged, however shifted its stance on the AUD level. While the Kiwi traded largely subdued ahead of key NZ data due later today.
Key headlines in Asia
RBA keeps rates unchanged at 2%, no explicit dovish bias
RBA shifts view on AUD, game changer?
Australia: June retail sales, trade upbeat
Gold bounces-off 1080 – key support
Dominating themes in Asia - centered on JPY, AUD, NZD
RBA’s status quo at its latest policy decision was widely anticipated, although the unexpected big shift on the exchange rate level by the central bank was the main driver lifting the Aussie from six-year trough back above 0.7300 levels and beyond.
The policy statement noted, “The Australian dollar is adjusting to the significant declines in key commodity prices.” While in previous policy decisions, the central bank maintained that “further AUD depreciation seems both likely and necessary.”
While the Kiwi is seen holding moderate losses as the jump in the Aussie did little to move its OZ neighbour as the NZD traders await key dairy auction data and employment data from the kiwi nation for fresh direction.
The dollar-yen pair gave back early gains and now hovers around 124 barrier, despite a tepid recovery seen in the greenback after the recent weakness backed by below estimates US ISM manufacturing PMI reported in the US last session. ISM manufacturing PMI eased to 52.7 in July from 53.5 results booked in June, which was the highest reading since January.
Asian markets are trading on a mixed note with Nikkei in Tokyo losing -0.16% to trade at 20512. While Chinese markets rebounded after the recent drop to fresh three-month lows, SSEC +1.34%. The Australian benchmark S&P/ASX 200 is 0.62% firmer at 5714 on above estimates Aus retail sales data. While South Korea’s Kospi advances 0.40%.
Heading into Europe - centered on EUR, GBP
After an eventful EUR calendar on Monday, there is nothing much to report in today’s European session ahead except for the much-anticipated UK construction PMI and the 2nd tier data in Spanish employment data.
The UK will report on its construction sector with the figure expected to stay well in expansion at 58.5, slightly better than the previous 58.1 result.
Spain's labor data for July, following the positive change in June when the number of unemployed declined by more than 94,700.
Looking ahead, the New York session also sees limited data on the cards with US factory orders and Fonterra’s fortnightly dairy prices auction from New Zealand main events to be watched. The GDT index price dropped by 10 percent last fortnight, it was the ninth consecutive fall in prices and the result was worse than analysts had been expecting.
EUR/USD Technicals
Research Team at AceTrader noted, " Euro's strong retreat to 1.0965 in NY session on Friday after early intra-day brief rally to 1.1114, then marginal weakness to 1.0941 yesterday signals further choppy trading below last week's top at 1.1129 would continue and with mild downside bias.
However, break of 1.0894 (reaction low on Thursday) needed to indicate correction from July's 12-week trough at 1.0808 has ended and yield weakness towards this support later. “
“On the upside, only a move back above 1.1114 would bring re-test of 1.1129, break would shift risk to upside for stronger retracement of early erratic fall from 1.1467 (May) towards 1.1216.”
Key headlines in Asia
RBA keeps rates unchanged at 2%, no explicit dovish bias
RBA shifts view on AUD, game changer?
Australia: June retail sales, trade upbeat
Gold bounces-off 1080 – key support
Dominating themes in Asia - centered on JPY, AUD, NZD
RBA’s status quo at its latest policy decision was widely anticipated, although the unexpected big shift on the exchange rate level by the central bank was the main driver lifting the Aussie from six-year trough back above 0.7300 levels and beyond.
The policy statement noted, “The Australian dollar is adjusting to the significant declines in key commodity prices.” While in previous policy decisions, the central bank maintained that “further AUD depreciation seems both likely and necessary.”
While the Kiwi is seen holding moderate losses as the jump in the Aussie did little to move its OZ neighbour as the NZD traders await key dairy auction data and employment data from the kiwi nation for fresh direction.
The dollar-yen pair gave back early gains and now hovers around 124 barrier, despite a tepid recovery seen in the greenback after the recent weakness backed by below estimates US ISM manufacturing PMI reported in the US last session. ISM manufacturing PMI eased to 52.7 in July from 53.5 results booked in June, which was the highest reading since January.
Asian markets are trading on a mixed note with Nikkei in Tokyo losing -0.16% to trade at 20512. While Chinese markets rebounded after the recent drop to fresh three-month lows, SSEC +1.34%. The Australian benchmark S&P/ASX 200 is 0.62% firmer at 5714 on above estimates Aus retail sales data. While South Korea’s Kospi advances 0.40%.
Heading into Europe - centered on EUR, GBP
After an eventful EUR calendar on Monday, there is nothing much to report in today’s European session ahead except for the much-anticipated UK construction PMI and the 2nd tier data in Spanish employment data.
The UK will report on its construction sector with the figure expected to stay well in expansion at 58.5, slightly better than the previous 58.1 result.
Spain's labor data for July, following the positive change in June when the number of unemployed declined by more than 94,700.
Looking ahead, the New York session also sees limited data on the cards with US factory orders and Fonterra’s fortnightly dairy prices auction from New Zealand main events to be watched. The GDT index price dropped by 10 percent last fortnight, it was the ninth consecutive fall in prices and the result was worse than analysts had been expecting.
EUR/USD Technicals
Research Team at AceTrader noted, " Euro's strong retreat to 1.0965 in NY session on Friday after early intra-day brief rally to 1.1114, then marginal weakness to 1.0941 yesterday signals further choppy trading below last week's top at 1.1129 would continue and with mild downside bias.
However, break of 1.0894 (reaction low on Thursday) needed to indicate correction from July's 12-week trough at 1.0808 has ended and yield weakness towards this support later. “
“On the upside, only a move back above 1.1114 would bring re-test of 1.1129, break would shift risk to upside for stronger retracement of early erratic fall from 1.1467 (May) towards 1.1216.”