Author: Dennis Li
The Australian dollar remains stuck within the same 120 point range we have seen for the last two weeks. We open today at close to the same level as yesterday morning, a touch over 0.7400 against the USD with the market awaiting the RBA meeting minutes this afternoon.
The USD fell slightly overnight as investors rebalanced their positions before Federal Reserve Chairman Jerome Powell’s first congressional testimony. The US dollar index is currently at 94.50. Last night’s 0.5 percent increase in the US retail sales data in June reinforces the confidence in the markets that US economic growth in the second quarter will likely keep the Fed on track to continue raising interest rates this year.
The Chinese yuan remained at its low around 6.67 against the greenback. The China’s Q2 GDP growth slowed to 6.7% amid fears of a full-blown trade war with the US. Meanwhile, the US launched five separate WTO dispute actions on Monday challenging retaliatory tariffs imposed by its trading partners. AUDCNY also remained little changed overnight around the 4.96 level.
Over concerns about China’s second-quarter economic growth and potential increases in production from Russia, US crude dropped by 4.15% to its three-month low of $68.06 per barrel overnight.
The rest of the week sees UK unemployment data and US industrial production tonight, EUR inflation tomorrow and Australian employment data on Thursday.
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