Australian Dollar Dented by RBA Chatter
The Australian Dollar fell on Tuesday following comments from Reserve Bank of Australia (RBA) Assistant Governor Christophe Kent. Kent suggested the RBA is prepared to continue to alter monetary policy in order to meet its targets, indicating that the door remains open for further monetary easing this year.
Today we have Australia’s latest PMI figures, which could lend some support to the ‘Aussie’ if private sector growth is shown to have accelerated this month as expected.
Pound Sterling (GBP) Stabilises, Boris Johnson Set to Become UK PM
Trade in the Pound (GBP) was mostly flat on Tuesday as markets reacted to the announcement that Boris Johnson had won the Conservative leadership election. This saw Sterling stabilise overnight as it brought an end to weeks of political speculation over who would replace Theresa May.
However, this may simply be the calm before the storm as GBP investors refrain from making any bets ahead of the announcement of Johnson’s new cabinet when he assumes office later tonight.
Euro Slips as ECB Meeting Looms
The Euro (EUR) weakened yesterday as investors remain wary of the single currency ahead of what is expected to be a dovish rate decision by the European Central Bank later in the week. However, helping to temper the losses in EUR exchange rates was the publication of the Eurozone’s latest consumer confidence index as it showed a slight improvement this month.
In the meantime we have the publication of the Eurozone’s latest PMI figures later this morning, which could see the Euro move lower if growth in the bloc’s private sector slowed this month as forecast.
US Dollar Bolstered by Budget Deal Relief
The US Dollar (USD) accelerated on Tuesday as the ‘Greenback’ was buoyed by Donald Trump’s announcement that a bipartisan budget deal has been agreed. This helped to offset a larger than expected fall in existing US home sales last month as it is hoped the deal will allow the US to avoid a fiscal crisis until at least 2021.
Whilst there is a lull in notable US economic data today, we may still see the US Dollar accelerate due to the potential weakness of some of its peers.
Canadian Dollar Muted as Oil Prices Stall
The Canadian Dollar (CAD) was left adrift on Tuesday, with the oil-sensitive ‘Loonie’ struggling to find momentum after crude prices stalled at $63 a barrel.
New Zealand Dollar Weakened by RBNZ’s Talk of Unconventional Monetary Stimulus
The New Zealand Dollar (NZD) recorded board losses during Tuesday’s session after the Reserve Bank of New Zealand announced it had begun contingency planning for unconventional monetary stimulus.
Looking ahead, the ‘Kiwi’ may remain on the back foot today, with New Zealand’s latest trade figures expected to show the country’s trade surplus narrowed last month.
Data Releases
July 24th 08:45 NZD Trade Balance (Jun) NZ$100m
July 24th 09:00 AUD CommBank Australia Composite PMI (Jul) 52.9
July 24th 18:00 EUR EUR Manufacturing PMI (Jul) 47.6
July 24th 18:00 EUR Services PMI (Jul) 53.3
July 24th 18:30 GBP Mortgage Approvals (Jun) 42,900
July 25th 03:00 GBP Boris Johnson Takes Office as UK PM