The Australian dollar continues to sink, weighed down by growing bets that the Reserve Bank of Australia (RBA) will cut interest rates in less than two weeks time along with ongoing US dollar strength.
After closing Wednesday’s session buying .7477, the AUD/USD sunk further in early Asian trade on Thursday, falling in sympathy with the New Zealand dollar as the Reserve Bank of New Zealand (RBNZ) signalled that a further reduction in interest rates was likely in its updated economic assessment releases earlier in the session.
While the RBNZ statement is directly linked to New Zealand interest rates, traders are taking the view that this will increases the likelihood that the RBA will also follow suit.
Next Wednesday’s Australian Q2 CPI report will be crucial in determining whether or not this view is justified.
As at 8.40am AEST, the AUD/USD currently buys .7466. It has now lost 2.7% from the highs struck last Friday.
Turning to Asian trade on Thursday, there’s yet again next to nothing scheduled, either in terms of data or events, that looks likely to dictate direction in the Aussie.
The National Australia Bank’s Australian business survey for the September quarter is due for release at 11:30am AEST, although, given markets have already received the monthly result for June, it’s unlikely to be market moving.
With nothing else of note on the calendar, headlines relating to the Bank of Japan’s monetary policy meeting next Friday, and as a consequence USD/JPY, will likely be influential. As is the case on quiet data days, the performance of Chinese stocks, the USD/CNH and crude oil futures may also sway the Aussie.
Later in the session the European Central Bank will deliver its July monetary policy decision — no change is expected — while in the US markets will receive weekly jobless claims, the July Philadelphia Fed business survey along with existing home sales for June.
Here’s the current Aussie dollar scoreboard.
- AUD/USD 0.7466 , -0.0011 , -0.15%
- AUD/JPY 79.91 , 0.04 , 0.05%
- AUD/CNH 4.9874 , -0.0049 , -0.10%
- AUD/EUR 0.6780 , -0.0007 , -0.10%
- AUD/GBP 0.5644 , -0.0015 , -0.27%
- AUD/NZD 1.0719 , 0.0088 , 0.83%