Australian Dollar Struggles Ahead of RBA Minutes
The Australian Dollar was put on the defensive at the start of this week’s session ahead of the release of the minutes from the Reserve Bank of Australia’s (RBA) June policy meeting. These could drag on the ‘Aussie’ if policymakers appear open to the possibility of additional rate cuts this year.
Coming up in today’s session we also have the publication of Australia’s latest house price index, which may put additional pressure on the ‘Aussie’ if prices slipped in line with expectations in the first quarter.
Pound Muted as Tory Leadership Races Continues
The Pound (GBP) was mostly subdued at the start of this week’s session as Conservative leadership contest rolled on, with most candidates attending press gallery hustings as they made their case to replace Theresa May as Prime Minister. One notable absence however was frontrunner Boris Johnson, whose bid to become Tory leader was given another boost on Monday after failed candidate Matt Hancock gave him his endorsement.
GBP investors are likely to remain focused on the Tory leadership race throughout today’s session as the second ballot takes place later this evening.
Euro Bolstered by Robust Wage Growth
The Euro (EUR) drifted higher throughout Monday’s session as EUR investors welcomed the latest Eurozone wage figures. According to data published by Eurostat, wage growth in the bloc rose from 2.3% to 2.5% in the first quarter, the strongest rise in nearly a decade.
However the Euro may be forced to relinquish these gains later this morning with the release of the latest ZEW Economic Sentiment Index expected to show that business sentiment in the Eurozone continued to deteriorate in June.
US Dollar Sinks on Weak US Payrolls
The US Dollar (USD) weakened at the start of this week’s session after the release of some gloomy US economic data. The Empire State Manufacturing Index plummeted from 17.8 to -8.6 in June according to the Federal Reserve. This was the worst reading since 2016 and prevented the ‘Greenback’ from maintaining the upwards momentum seen at the end of last week’s session.
Outside of any surprises in US-China trade talks, expect to see the US Dollar remain mostly rangebound over today’s session as USD investors await the conclusion of the Federal Reserve’s latest policy meeting on Thursday.
Canadian Dollar Muted as Oil Prices Weaken
The Canadian Dollar (CAD) was rangebound during yesterday’s session with the oil-sensitive ‘Loonie’ struggling to find momentum as crude prices slipped, giving up some of the gains made last session.
New Zealand Dollar Buoyed by Surprise Rise in Services PMI
The New Zealand Dollar (NZD) edged higher at the start of this week’s session on the back of New Zealand’s latest Services PMI as NZD investors welcomed a surprise upswing in domestic service sector growth in May.
Looking ahead we may see the ‘Kiwi’ weaken overnight if we see another drop in prices at the global dairy price auction.
Data Releases
June 18th 11:30 AUD House Price Index (Q1) -2.5%
June 18th 11:30 AUD RBA Minutes
June 18th 18:00 EUR ECB Draghi Speech