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 after a relatively quiet session overnight.

Australia: The AUD was trading below USD0.7350 this morning followinga fall in Chinese equity markets and a quiet local session here yesterday.The RBA minutes had little effect after last week’s Statement on MonetaryPolicy, but were upbeat about the domestic economy. A drop in Chineseequity markets caught the markets attention however, placing pressure onthe domestic currency as well as most majors overnight. There didn’tseem to be one specific reason for the drop, moreover a combination, andwith little happening anywhere else, it dominated sentiment of globalmarkets. There is little in the way of top tier data being released locallytoday so markets will probably be focused on the Chinese markets onceagain.

Majors: The USD gained against the EUR following solid US housingnumbers buoyed hopes of greater growth in the US economy. The moveswere pretty contained, however as investors are reluctant to make anylarge moves ahead of US inflation data for July and the release of theminutes from the Federal Reserve’s policy-making group on Wednesday.Both pieces of information are more than likely to give investors the insightinto what the Federal Reserve are thinking about the timing for raisingshort-term interest rates for the first time in nearly a decade. Elsewhere,the GBP was boosted by a 0.4% increase in core CPI to 1.2% y/y.Headline inflation rose 0.1% y/y in July against market expectation for justa flat result. With recent talk about the possibility of hiking rates, this datafurther increases the likelihood of further discussion on the subject. Equitymarkets had a quiet session both in the US and Europe while oil priceswere mixed as was gold. In the US tonight we have FOMC minutes beingreleased from their July meeting as well as US CPI figures.

Economic Calendar 19 AUG

  • AU WBC Leading Index Jul
  • AU Skilled Vacancies Jul
  • US CPI Jul
  • US Fed Reserve Release July 28-29 FOMC Meeting Minutes

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