The Australian dollar is stumbling around without really going anywhere

Kevin Frayer/Getty Images
  • The Australian dollar traded in a thin range on Monday.
  • Despite some major economic releases, it continued to take its cues from movements in the offshore traded Chinese yuan.
  • The minutes of the RBA’s July monetary policy meeting will be released today, as will New Zealand Q2 CPI.

The Australian dollar staggered its way through Monday’s trading session, venturing lower, then higher, before losing ground again.

In the end, it basically ended up where it started.

The scoreboard as at 7am in Sydney tells the story.

AUD/USD 0.7419 , -0.0004 , -0.05%
AUD/JPY 83.29 , -0.05 , -0.06%
AUD/CNH 4.9721 , -0.0067 , -0.13%
AUD/EUR 0.6334 , -0.0022 , -0.35%
AUD/GBP 0.5603 , -0.0005 , -0.09%
AUD/NZD 1.0941 , -0.0011 , -0.10%
AUD/CAD 0.974 , -0.0025 , -0.26%

Yes, it was a yawn-fest with little reaction to major economic data released by China and the United States during the session.

Chinese Q2 GDP offered few surprises, as did a majority of China’s monthly economic activity indicators with the exception of industrial output which missed badly to the downside.

Even solid US retail sales data, including a hefty upward revision to the prior months data, wasn’t enough to derive a significant reaction across markets with strength in the headline reading offset by weakness in the control group, closely correlated with household spending in US GDP.

Oil futures also collapsed by 4% yet the Aussie barely budged.

Instead, the AUD/USD continued to take its cues from movements in the offshore-traded Chinese yuan, or CNH, maintaining the vice-like grip it’s had in recent weeks.

When the yuan goes, the Aussie is generally following at present.

Investing.comAUD/USD Hourly Chart

Turning to the session ahead, the yuan’s influence over the Aussie is likely to persist despite a raft of economic and central bank releases on Tuesday.

Domestically, the minutes of the Reserve Bank of Australia’s (RBA) July monetary policy meeting will be released at 11.30am AEST. Most interest will be on the bank’s commentary on the housing market, domestic wholesale funding costs and growing external economic threats abroad.

Before that arrives, New Zealand will also release Q2 CPI data at 8.45am AEST. A quarterly gain of 0.5% is expected, leaving the change on a year earlier at 1.6%.

Chinese new home data for June — arriving at 11.30am AEST — is the other headline act in Asia.

Later in the session, data highlights include UK unemployment, Italian CPI along with industrial production and NAHB home builder confidence from the US.

While not exactly a quiet data calendar, they’re likely to play second-fiddle to US Federal Reserve Chair Jay Powell’s semi-annual testimony to the US Senate Banking Committee from midnight AEST.

Bank of England Governor Mark Carney will also be in action.

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