The Australian dollar is treading water

Photo by Franco Origlia/Getty Images
  • The Australian dollar had a quiet session on Tuesday, operating in small ranges against all of the major crosses.
  • There’s a smattering of second-tier data releases scheduled in Asia today, although none appears likely to generate much volatility in currency markets.
  • Highlights later in the session include UK CPI along with the Bank of Canada’s April interest rate decision.

The Australian dollar is treading water, replicating the broader theme seen across currency markets on Tuesday.

Here’s the scoreboard at 7am in Sydney.

AUD/USD 0.7769 , -0.0009 , -0.12%
AUD/JPY 83.13 , -0.18 , -0.22%
AUD/CNH 4.8800 , 0.0064 , 0.13%
AUD/EUR 0.6280 , -0.0002 , -0.03%
AUD/GBP 0.5436 , 0.0012 , 0.22%
AUD/NZD 1.0579 , 0.0018 , 0.17%
AUD/CAD 0.9744 , -0.0031 , -0.32%

The Aussie traded in a tiny 30 pip range against the US dollar, showing little reaction to the release of major Chinese economic data during the session.

Chinese GDP, as usual, offered few surprises to traders, printing bang in line with forecasts for year-year growth of 6.8% in the first quarter of the year.

The release of the minutes of the RBA’s April monetary policy meeting were also largely as expected.

That kept movements in the Aussie to a minimum in Asia, a theme that carried through for the remainder of the session.

The US dollar was supported at the margin by stronger-than-expected US industrial production and building approvals data. Along with a sharp dip in German investor confidence in April and small miss in UK average weekly earnings in February — weighing on the euro and British pound — it saw the US dollar index push marginally higher during the session, resulting in a modest decline in the AUD/USD.

AUD/USD Hourly Chart

Looking ahead, there’s a smattering of second-tier economic data releases scheduled in Asia on Wednesday.

In Australia, markets will receive skilled vacancy data and NAB’s cashless retails sales index. The latter has often acted as a reliable lead indicator for Australia’s official retail sales report released by the ABS.

Regionally, Japan will release trade figures for March while Chinese new home price data will also arrive during the session.

Later in the day, data highlights include inflation figures from the UK and eurozone for March.

On the monetary policy front, the US fed will release its Beige Book on economic conditions while FOMC members Bostic, Dudley and Quarles are also scheduled to deliver speeches.

The Bank of Canada (BoC) will also announce its April interest rate decision at midnight AEST.

Markets are only pricing in a small chance that the BoC will lift rates by 25 basis points, adding to the three increases already delivered.

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