RBA taking it easy

17 May, 2016

No major central bank decisions this week, but plenty of indications of their thinking with minutes from the FOMC, ECB and the RBA overnight from Australia. The rate cut earlier this month was not fully expected by the market, so it should not be a surprise that the minutes were suggesting that the RBA is taking a cautious approach to the outlook. Perhaps it is not surprising was that it was the “broad based softness in prices and costs” was the main factor behind the decision to cut rates to 1.75%. They also noted the impact of “supervisory measures” on the housing market, which had tightening lending standards and taken some of the heat from the housing market, reducing the risks of lowering rates. The Aussie jumped around 1% on the back of the release, brining it above the 2.5 month lows recorded yesterday on AUDUSD at 0.7237. The focus remains with New Zealand and Canada, the other commodity bloc currencies, as the next major central banks to cut rates, with New Zealand likely to cut rates early June. AUDNZD was also marking 2.5 month lows yesterday, but the policy backdrop does argue for a more sustained correction into June.

Sterling has been on a firmer footing for the past couple of sessions, something which could be challenged by today’s inflation data. The headline rate is seen steady at 0.5%, with core prices falling from 1.5% to 1.4%. PPI data is also seen at the same time, so volatility risks are increased. Sterling has 5 weeks to go to the ‘Brexit’ referendum in June, which still has the potential to weakness the currency should the polls continue to show only a slight margin for the ‘remain’ camp. US CPI data is also seen this afternoon. The dollar has settled into a range (dollar index) after the recent recovery from the early May lows. Meanwhile, ahead of the G7 meeting at the end of the week, the pressure is reduced on the Bank of Japan in terms of the strength of the yen vs. the USD, the yen 2.6% weaker vs. the dollar from the USDJPY lows.


Source link  
Oil Inventories to Show a Draw

Expectations (Apr) are expected to be released with a prior reading of 16.7. This data has been weakening since a reading of 52.0 was recorded in...

Chances of RBA Rate Hike

NZDUSD bucked the trend overnight, as most other currencies managed to retrace some of their declines against the USD. The pair hit fresh...

Consumer Sentiment Index Close to Higher

US Fed Boston President Rosengren is due to deliver the keynote speech on the economic outlook, at the Greater Boston Chamber’s Economic Outlook Breakfast...


Chinese president soothes worries

With US Producer Prices data on the way this afternoon, and predicted to be largely as expected, the morning session will be dominated by central bankers...

Markets fall after more tariffs proposal

Friday's session is expected to be volatile, with Non-Farm Payrolls (13:30 UK Time) ahead and President Trump’s proposal for an additional $100B...

Korea gets exemption on steel tariffs

The US and South Korea have reached agreement on a Trade deal that comes with the added bonus for South Korea of a permanent exemption from...


EU Publishes List of Tariffs on US Goods

Over the weekend, the EU published a list of tariffs on US products in response to the US tariffs on Steel and Aluminium. The total value of EU tariffs...

Consumer Price Index and Housing Starts

Eurozone Consumer Price Index – Core (YoY) (Feb) will be released. The consensus points to an unchanged value of 1%. Consumer Price Index...

USD Weakens as Risk-Off Returns

Yesterday, the US announced Tariffs on Steel and Aluminium, which prompted an outcry from various global leaders and an acceleration in the...


In the past 24 hours Bitcoin has lost -7.85% and reached $8845.74. Open your trading account with the best cryptocurrency brokers on special terms today.

In the past 7 days the EUR/USD pair has lost -1.2229% and is now at $1.2229. Start trading and making money on Forex today.

In the past 7 days Ethereum has gained 17.25% and is now at $615.416. Have the most popular cryptocurrencies compared online 24/7.


Top Brokers offering Daily Forex Market Reviews


Forex Currencies Forecasts


Top 10 Forex Brokers 2018

# Broker Review
1easyMarketseasyMarkets90%
2FXTMFXTM87%
3HYCMHYCM85%
4FxProFxPro84%
5FIBO GroupFIBO Group82%
6FXCMFXCM70%
7XMXM68%
8Fort Financial ServicesFort Financial Services67%
9Alfa-ForexAlfa-Forex66%
10HotForexHotForex66%
  


Share: