Australian one dollar coins
A handful of Australian one dollar coins is shown in Sydney, February 18, 2004. Reuters/Tim Wimborne

Bell FX Currency Outlook: The Australian Dollar is slightlylower this morning as markets struck a calmer tone over thelast 24 hours.

Australia: After an interesting week, markets were generally calmeryesterday, with the AUD currently trading around 0.7370 – right in themiddle of its range for the day. Market volatility was dampened bycomments from PBoC policy makers who stated that there was no basisfor the currency’s constant depreciation and that the adjustment wasalready largely complete. This came after a further depreciation in theCNY yesterday morning, although by a smaller amount than the previoustwo days. Yesterday’s fixing rate was set to USD/CNY 6.4010, only 140points above the previous day’s close at 6.3870. On this news the AUD fell40 points to 0.7330 before quickly bouncing, touching a high around0.7400 and settling in the 80s for the afternoon. Overnight some US datasaw the AUD lose ground against the USD, while news of disruption to themajor Chinese port of Tianjin after the explosion Wednesday has not sofar affected the outlook for iron ore prices too much. Today RBA AssistantGovernor (Economic) Christopher Kent speaks on Recent Labour MarketDevelopments at 12:15pm AEST.

Majors: As stated above, the USD is up as US retail sales gained 0.6%(as expected) in July, while June’s sales were revised up to 0.0% m/mfrom a previously estimated 0.3% m/m decline. However, control groupretail sales – which feed directly into GDP – were weaker than expected,gaining 0.3% m/m (mkt: 0.5%). Overall, upward revisions implied thereport was marginally stronger than expected. US Initial jobless claimsrose to 274k (mkt: 270k) from a downwardly revised 269k, but the fourweekmoving average edged marginally lower to 266k from 268k. InEurope Minutes from the ECB’s 16 July meeting struck a marginallydovish tone. While the Bank noted that there was a “growing number ofindications that a turning point [on inflation] might well have been reached”inflation still remained “unusually low”. The EUR finished the session flat,having made 6 straight days of gains against the USD. European Q2 GDP,US industrial production and University of Michigan confidence will be thekey drivers tonight.

Economic Calendar 14 AUG

  • AU RBA Assis. Governor Chris Kent speaks
  • GE GDP SA QoQ/YoY
  • EC GDP SA QoQ/YoY
  • EC CPI Core YoY / CPI MoM YoY

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