CURRENCY UPDATE: Australia After looking fairly solid just under the USD0.9300 level yesterday, the AUD was sold off down towards USD0.9200 overnight as traders moved out of the AUD ahead of the FOMC’s two day meeting beginning tonight Australian time. The AUD has been unable to hold onto its gains above USD0.9300 for the last month as the market continues to worry about possible rate cuts here in Australia and an economic slowdown in China. Offshore worries have also not helped with the market still unsure about the winding down of the US $85 billion-a-month stimulus plan which is expected to begin in September. On the day, RBA’s Governor Stevens is making a lunch time speech at the Anika Foundation Luncheon in Sydney. The topic is current economic policy issues. In the past when Mr Stevens has addressed this charitable foundation the AUD has moved and in both cases it’s been supported on the upside. Majors Offshore the USD rose against most of its major counterparts as investors prepare for the two day Federal Reserve meeting. The Federal Open Market Committee is expected to confirm its intentions to begin to ease off its $85 billion-a-month program. Over the last couple of weeks the market has interpreted a string of Fed talks as being dovish, which in turn weakened the USD. So tonight’s meeting is taking centre stage because the market is looking for confirmation from the Fed that the highly anticipated unwinding will begin in September. Following the two day meeting the US have a string of important data events including US second quarter GDP Wednesday, manufacturing data on Thursday and non-farm payrolls on Friday. Trading offshore ahead of this week’s major events is likely to be subdued with activity picking up later in the week.
Posted on: Mon, 29 Jul 2013 23:37:40 +0000
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