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 AUD lost some groundovernight in a night of consolidation for currencies, with GBPfailing to capitalise on strong consumer credit numbers,before the FOMC comments saw the USD strengthenmodestly.

Australia: It was a relatively quiet session ahead of the FOMC meeting,and there wasn’t a lot of action afterwards either. The Federal Reserve, onbalance, said little to change market perceptions of an each way betregarding the first hike occurring in September. The AUD was sold slightly,with the Greenback strengthening throughout the North American session,with the feeling that a September tightening remains squarely on the table.Domestically, June building approvals are due this morning as are exportand import prices for merchandise trade which is expected to show a 5.0%export price hit from weak commodity prices. Before this data, RBAGovernor Glenn Stevens will speak at an Asia Financial CooperationConference but after last week’s address to the Anika Foundation lunch,this is unlikely to dwell on issue relevant to monetary policy.

Majors: The USD found strength following the FOMC meeting. Languagearound the labour market was stronger, removing “somewhat” from thecomment “underutilization of labor resources has diminished”, andaccordingly they noted that it will be appropriate to raise rates when“some” further improvements in the labour market are seen. So for now,the ship is being kept steady, and the markets believe the Fed will besatisfied with the muted reaction. Markets will look to US Q2 GDP tonight.

Economic Calendar 30 JUL

  • AU RBA Governor Stevens speaks to Asia FinancialCooperation Conference, Sydney
  • AU Building Approvals Jun
  • GE Unemployment Jul
  • US GDP Annualised Q2

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