- The Australian dollar had a quiet session on Tuesday, trading in thin trading range despite some wild moves in stocks, bonds and crude oil prices.
- The Japanese yen was the top performer during the session, benefiting from safe-haven flows. The GBP and EUR also climbed after falling heavily a session earlier.
- There’s a bit of economic data out today, although whether it will be able to attract any interest from traders is debatable.
The Australian dollar had a quiet session on Tuesday, trading in thin trading range despite some wild moves in stocks, bonds and crude oil prices.
Here’s the scoreboard at 8am in Sydney.
AUD/USD 0.7085 , 0.0006 , 0.08%
AUD/JPY 79.66 , -0.19 , -0.24%
AUD/CNH 4.9151 , 0.0047 , 0.10%
AUD/EUR 0.6176 , 0.0003 , 0.05%
AUD/GBP 0.5455 , -0.0006 , -0.11%
AUD/NZD 1.0807 , 0.0019 , 0.18%
AUD/CAD 0.9269 , -0.0008 , -0.09%
After opening the day at .7079, the AUD/USD oscillated between .7056 to .7090 throughout the session, paying scant attention to huge losses in Asian and European stocks as well as a near 5% plunge in crude oil futures.
A sharp decline in US 10-year bond yields — a move that was subsequently reversed late in the session — was also largely ignored.
The Aussie’s performance was similar to that seen in broader currency markets with most of the major finishing the session at similar levels to 24 hours earlier.
It lost modest ground against the British pound following unsubstantiated reports of a potential breakthrough in Brexit negotiations.
“Irish broadcaster RTE reported, without stating its sources, said the EU is to offer UK PM May a UK-wide customs union as a way around the Irish backstop issue, to be negotiated beyond the withdrawal agreement as a separate treaty,” said Jason Wong, Senior Markets Strategist at BNZ.
After jumping to as high as 1.3040 against the greenback on the news, the GBP gave back most of that move in the latter parts of trade.
The Euro also finished marginally higher despite the European Commission officially rejecting Italy’s 2019 budget proposal, giving lawmakers three weeks to come up with a more palatable plan to appease current concerns.
Before the decision, Italian Prime Minister Conte said “there isn’t any B plan,” adding that he could not accept any substantial change in plans already submitted because “it will be difficult for me because I cannot accept that”.
Reflecting the risk-off tone seen during the session, the Japanese yen benefited from safe-haven flows, helping it to gain against all of the major crosses, including the Aussie dollar.
Turning to Wednesday’s trading session, broader market moves look set to be once again dictated by headline, technicals and sentiment given the absence of major economic data.
Japan will release flash manufacturing PMI data for October at 11.30am AEDT, kicking off a raft of similar manufacturing and services readings from the Eurozone and US in the second half of the session.
Of all the data releases scheduled, the PMI deluge carries the greatest potential to move markets on Wednesday.
Outside of those events, markets will also receive monetary growth figures from the Eurozone along with new home sales and house price data from the United States.
On the central bank front, the Bank of Canada will announce its October monetary policy decision at 1am AEDT. A 25 basis point hike is seen as a near-given, meaning commentary from the bank will likely determine how the loonie fares in latter parts of trade.
Bullard, Mester and Bostic from the US Fed are also scheduled to deliver speeches. The Fed will also release its latest Beige Book on economic conditions at 5am AEDT.
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