Australian dollar notes and coins can be seen in a cash register at a store in Sydney, Australia, February 11, 2016.
Australian dollar notes and coins can be seen in a cash register at a store in Sydney, Australia, February 11, 2016. Reuters/David Gray

Bell FX Currency Outlook: The AUD and NZD are lower this morning but otherwise currency markets broadly consolidated overnight. The highlight today is the RBA’s interest rate decision at 2:30pm.

Australia: Today in Australia we also have the ANZ-Roy Morgan Australian consumer confidence released at 9:30am. With China and Hong Kong closed yesterday, Asian equity markets struggled for direction and this theme was carried over into the overnight session. The RBA decision will drive the AUD and NZD, with currency commentary the key focal point. Globally it’s the service sector PMIs that will set direction and expectations are for increases. There are no market expectations of any movement in the cash rate today and the core question will be on how the RBA react to the AUD strength.

Majors: Last week’s boost to equities from the Fed Yellen’s message of lower rates for longer appears to be running out of steam with the market seemingly in a wait and see mode ahead of the earnings reporting season which begins later this week. Ahead of the 17 April oil producers meeting, scepticism is building that a meaningful deal will be reached. WTI Oil fell by 2.6% overnight and now is back below the $36 mark for the first time since 3 March. The fall in commodity prices has been broad based, with copper down 1.6%, gold -0.5% and the CRB index -1.3%. On the back of this, commodity related currencies were the underperformers overnight. The JPY up 0.31% on the day and nearly 2% over the past 5 days. Doubts over the BoJ reflation strategy appears to be weighing on the Nikkei, pushing the Yen higher against the USD.

Economic Calendar 05 APR

  • AU Trade Balance Feb
  • AU RBA Interest Rate Decision Mar
  • EC Retail Sales Feb
  • US Trade Balance Feb

Bell Fx

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