The AUDUSD has been trading sideways for the first part of the week, with the release of the US Retail sales failing to add any real influences to the US-dollar in overnight markets. The RBA Minutes released during our session yesterday, didn’t really add to the messages the market already knew, but highlighted how undecided the committee was about the path of future rate hikes. Following the pause at the July meeting the markets have almost fully factored in one more to come, timing remains the question. The central bank is likely to remain restrictive on policy while the labour market remains tight, with unemployment near multi-decade lows. The hawkish tilt from the RBA should be favourable for the AUD, so too the buoyant stock markets as they proceed through earnings season in the US, however, momentum remains neutral on the pair, with traders finding rallies limited by supply into 0.6825/50 zone and initial support into the 0.6775/80’s.
Wall Street traded higher, with US Bank stocks leading the way as strong earnings releases help to boost the Dow index higher. The DJI was up 1.1%, the S&P500 closed higher, gaining 0.7% and the Nasdaq also closed up 0.8% for the session. Australian shares are set open positive today, following the performance of global share markets and hopes that China will implement more stimulus measures to underpin their economy, favouring commodities.
Gold prices traded over one percent higher for the day, as markets shift bets on Fed interest rate expectations along with a softer US-dollar.
Copper prices eased further on the LME as investors continue to assess the impact of slower global growth and demand from China. Iron Ore prices were back into daily gains, as traders contemplate the possibility of further stimulus from Beijing.
Brent Crude Oil prices regained previous session losses as the US-dollar retreats on expectations for Fed actions on interest rates going forward.