Bell FX Currency Outlook: The continued slump in Chinesemarkets has weighed on the AUDUSD which now firmly sitsbelow 0.7200 level.

Australia: In Australia, Q2 balance of payments, July building approvals and ANZ-RM consumer confidence will be released this morning, and the RBA’s cash rate decision announced at 2:30pm AEST. In China bothofficial PMI, with particular focus on manufacturing and the Caixin PMIdata for August will be released at 11am and 11:45am AEST respectively. Commentary from the RBA on recent offshore developments will be key for AUD and NZD. The RBA is widely expected to remain on hold, focus will turn to the accompanying statement for any clues on the RBA’s future policy bias in light of the continued weakness in the commodities complexas well as China’s growth concerns. Chinese data today and US data tonight are also likely to be key currency market drivers.

Majors: It was quiet during the London session due to a UK Bank Holiday. Oil prices bounced sharply (up almost 8%) on the OPEC comments, while the EIA’s decision to trim its US production forecasts also provided some support. WTI and Brent prices now both up around 25% from lows hit last week. The U.S. reduced its output estimates andamid talk that OPEC are willing to talk to other producers on regaining market stability. USD Index ended with a modest drop of 0.2%. U.S data was weaker with Aug Chicago PMI slipping to 54.4 from 54.7 in July, led by softer new orders and output. Fed funds futures market is still pricing in sub 40% chance of a September rate hike.

Economic Calendar 01 SEPT

  • CH Manufacturing PMI
  • AU RBA Cash Rate Target
  • US ISM Manufacturing
  • CH Caixin China PMI Services

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