AUD/USD minor correction capped at 0.7599 post FOMC minutes

Currently, AUD/USD is trading at 0.7591, down -0.16% on the day, having posted a daily high at 0.7634 and low at 0.7571.

AUD/USD had picked up a bid earlier in the day despite metals still being in the red and a firmer dollar. However, despite a relatively muted reaction to the FOMC minutes, that move from the aforementioned lows has been capped.

The key notes form the minutes are as follows:

• Most Fed policymakers viewed recent softness in inflation data has had little bearing on inflation trend -minutes from June 13-14 meeting. 
• Several Fed policymakers saw a recent increase in import prices as consistent with inflation rising in the medium term.
• Several Fed policymakers were concerned recent softness in inflation might persist due to limited pass-through from resource utilisation.
• Several Fed policymakers wanted to announce start of balance-sheet trimming within a 'couple of months,' others wanted to wait until later in 2017 
• Fed Chair Janet Yellen suggested announcing new approach to balance sheet plan at June 13-14 meeting.
• Fed policymakers discussed possible reasons why financial conditions had not tightened following hikes in fed funds rate. 
• Almost all Fed policymakers supported June hike; one wanted to wait until inflation rose.

Focus will now be with Yellen’s Congressional testimony coming up next and for the time being, as a result of the minutes of the June meeting, the Fed funds futures odds are for an additional hike in 2017 are now at 60%.

Fed: Next rate hike will occur in December - Wells Fargo

Meanwhile, AUD/USD consolidates the minor correction of the reaction to the RBA's rate decision last week. The RBA surprised markets when the outcome showed that the Central Bank went against the collective shift in tones from its counterparties. The RBA has been regarded as being intent on protecting against a rising Aussie. Data today for the U.S. showed that May factory orders declined more than expected, while the final reading on durable goods orders showed a decline of 0.8%, matching preliminary data. 

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AUD/USD levels

Analysts at Commerzbank explained that AUD/USD has failed at the top of its converging range. "The market has failed on its initial test of top of the triangle at 0.7710. It has already eroded its short-term uptrend and we suspect that we will see a slide back towards the 200 day ma at 0.7530. Failure here would signal a slide to the bottom of the range at 0.7348."