The Australian dollar continued to tread water in overnight trade as a slow economic calendar and investor caution ahead of major speeches from US Fed chair Janet Yellen and ECB president Mario Draghi combined to keep traders on the sidelines.
Here’s the scoreboard as at 7.40am AEST.
AUD/USD 0.7896 , -0.0004 , -0.05%
AUD/JPY 86.48 , -0.06 , -0.07%
AUD/CNH 5.2596 , -0.0019 , -0.04%
AUD/EUR 0.6691 , -0.0003 , -0.04%
AUD/GBP 0.6167 , -0.0004 , -0.06%
AUD/NZD 1.0948 , 0.0002 , 0.02%
AUD/CAD 0.9887 , -0.0001 , -0.01%
The AUD/USD traded in a thin range .7863 to .7915 throughout the session, continuing the theme seen earlier in the week.
Indeed, at 1.09%, the Aussie is currently on track to record its smallest weekly trading range since late December 2014.
It’s been just plain dull.
Whether the Aussie continues the pattern seen earlier in the week will largely be determined by developments at the Jackson Hole Economic Symposium later in the session.
US Fed chair Janet Yellen will speak at midnight AEST with ECB president Mario Draghi following five hours later at 5am AEST.
While clearly a risk event for markets, few expect anything meaningful to come from either speech when it comes to the outlook for monetary policy.
“Our view is that policy changing speeches are not delivered outside of scheduled central bank policy meetings, so the Jackson Hole Economic Symposium is likely to disappoint market participants that expect ‘game changing’ speeches to be delivered,” said Elias Haddad, senior currency strategist at the Commonwealth Bank.
Although indicative of the collective view, traders are clearly cautious heading into this event, keeping market movements this week to a minimum.
Before Yellen and Drgahi take to the dais, there are a number of important data releases scheduled, although its questionable as to just how much impact they may have on the markets.
In Japan, inflation data for July will be released at 9.30am AEST.
That will be followed by the second reading of Q2 GDP and business confidence figures from Germany along with durable goods orders from the US.
Of all three, the durable goods report appears the most likely to generate some volatility in the Aussie.
“The market is looking for a 6% pullback in headline orders, payback after the boost from aircraft orders last month. Core orders are expected to rise 0.4% after being flat in June,” said David de Garis, economist at the National Australia Bank.
It will be released at 10.30pm AEST.