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: Today’s markets maybe quiet ahead of The Fed’s statements due in the early hours of our Thursday morning (05:00 AEDT).

Australia: Equities and commodities had a poor session, dragging commodity currencies such as the AUD with them. AUD/USD remained below 0.7500. The weaker US retail sales report was somewhat offset by a pick-up in the Empire manufacturing survey. The focus for currency markets will be on the FOMC meeting tomorrow morning. Yesterday’s publication of the RBA March Board meeting minutes concluded that there is no debate about whether there is scope for further easing, changing its view from “the outlook for continued low inflation may provide scope for easier monetary policy” to “continued low inflation would provide scope to ease monetary policy further” though again, this was qualified by “should that be appropriate to lend support to demand”. The “continued” low inflation may be a heads-up to the outcome of the March quarter CPI being important.

Majors: US Retail sales report was disappointing, if largely driven by lower receipts at service stations (down 4.4% m/m) due to the fall in petrol prices. T GDP contributing control group coming in flat in Feb, while all of January readings were the subject of substantial downward revisions. The US Empire Manufacturing Index was better than expected at +0.6, its first positive reading in eight months. Falls in iron ore and oil along with renewed China concerns sent AUDJPY 1.3% lower. EUR and particularly the JPY were stronger as markets took BoJ inaction as a sign of approval for JPY strength. NZD is the worst performer overnight, with AUD/NZD spending time on a 1.13 handle for the first time since last September. This follows the latest Global Dairy Trade auction which produced a 2.9% fall against the pre-auction whisper numbers of +5-7%.

Economic Calendar 16 MAR

  • US CPI Ex Food and Energy Mom/YoY
  • US FOMC Rate Decision
  • NZ Current Account GDP Ratio YTD
  • US CPI MoM/YoY

Bell Fx

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