Australian Dollar (AUD) Mixed as Australia Marks Lowest One-Day Coronavirus Cases in a Month
The Australian Dollar (AUD) was mixed during Tuesday’s session following the release of the latest Reserve Bank of Australia (RBA) monetary policy minutes.
The RBA adopted a more optimistic tone in its latest minutes, with policymakers stating current measures are working ‘broadly as expected’ without a need to ease policy further. Added to this, coronavirus cases fell to the lowest one-day increase in a month as in Victoria and New South Wales reported lower numbers.
Looking ahead, the ‘Aussie’ could give up any gains and suffer losses if the latest Westpac Leading Index disappoints investors with its insight into the Australia’s economic activity.
Pound (GBP) Moves Towards Five-Month High Ahead of Brexit Talks
The Pound (GBP) edged up towards a five-month high against the US Dollar during Tuesday’s session as Brexit talks between the UK and EU restarted.
Sterling benefitted from a weaker US Dollar, but traders remained cautious ahead of the next round of post-Brexit trade talks, bracing for further GBP volatility.
The latest UK inflation data, which is expected to stall again, will likely drive Pound exchange rates today. However, if any surprises in the data suggests the economy is moving towards recovering from the dire GDP slump in Q2, it will boost GBP sentiment.
Euro (EUR) Struggles Following ECB de Guindos Speech
The Euro (EUR) was able to rise against a weaker US Dollar but slumped against the Pound during Tuesday’s session after a speech from the European Central Bank’s (ECB) Vice-President Luis de Guindos.
According to de Guindos, European banks are unlikely to recover from the coronavirus crisis before 2022. He noted the recovery in the bloc’s economy would be fundamental in boosting banks in the Eurozone.
Today could see the single currency suffer losses if the latest Eurozone inflation data disappoints investors and shows monthly inflation slumped more than expected in July.
US Dollar (USD) Index Tumbles to Lowest Level in Over Two Years
The US Dollar (USD) slumped against a handful of its rivals for a fifth day in a row of trading, which sent the Dollar index to its lowest level in over two years.
The ‘Greenback’ continued to suffer during Tuesday’s session as net bearish bets of USD rose to their largest since May 2011 last week and further data suggests the position has grown further since. While the currency has tumbled in recent weeks, it remains 27% higher than its 2011 levels, which could suggest the currency will see further declines.
The US Dollar could suffer further losses during today’s session as traders eagerly await the latest Federal Open Market Committee (FOMC) minutes due for release later today.
Canadian Dollar (CAD) Struggles despite Broadly Steady Oil Prices
The Canadian Dollar (CAD) struggled against the majority of its rivals but made gains against a weaker US Dollar as oil prices were broadly steady during Tuesday’s session.
Oil prices clung onto gains from Monday’s session thanks to high compliance with production cuts from members of OPEC+. According to a draft report seen by Reuters at the start of the week, a technical panel found that compliance with OPEC+ oil cuts in July was between 95% and 97%.
Looking ahead, the ‘Loonie’ could surrender any gains following the release of the latest inflation data if July’s inflation rate does not edge up as high as expected.
New Zealand Dollar (NZD) Falls as Auckland Remains in Lockdown
The New Zealand Dollar (NZD) edged lower against a handful of currencies but made gains against a weaker US Dollar.
The ‘Kiwi’ continued to struggle with Prime Minister Jacinda Arden’s announcement the general election would be postponed as Auckland remained in lockdown due to the rise in coronavirus cases.
Looking ahead, traders are likely to remain cautious as the country’s largest city remains under lockdown. A significant increase in coronavirus cases in New Zealand is likely to weigh on NZD.