The RBA kept rates on hold yesterday and the accompanying statement did little to fuel the recent A-dollar fire. Basically the RBA reiterated that they are happy where everything is for the moment and don’t expect any near-term changes.
After an initial spike higher the Aussie dollar moved slightly lower against most majors. One currency the Aussie did move higher against was the Kiwi as a bit of steam moves out of the recently hotter Australasian currencies.
Manufacturing data from China yesterday was received pretty much on expectation signalling nil to no growth or contraction. In Europe there was a positive reading from German unemployment and US manufacturing showed growth, albeit slightly lower than expectations.
There will be some focus on the greenback this week as the market watches the economic front for future monetary policy from the Federal Reserve. Fed Head, Janet Yellen’s speech Monday wasn’t too dissimilar from RBA Head, Glen Stevens’ signalling little change if any to monetary policy in the near future. Unemployment figures are due from the US on Friday and as always post-GFC, will be closely watched for US dollar strength. A higher reading in US employment should support the USD whilst a weak figure could see the USD soften and commodities like gold move higher.
Today we will see housing data from Australian which could possibly boost the Aussie if strength is seen, however after a number of consecutive days moving higher the Aussie dollar may be due for a pull-back.