Pushing aside a resilient performance from European and US stocks, the Australian dollar slipped below 0.7100 in overnight trade, weighed down by broad based US dollar strength and lower base metals prices.
With the exception of crude prices which ripped higher in late trade, largely in response to short covering following a significant rout last week rather than any fundamental reasoning, the commodities complex was weaker with copper falling to a fresh 6-year low while the spot iron ore price slid by a further 0.83%.
As at 8.30am, the AUD/USD currently buys .7089, down marginally on Monday’s closing level of .7126. At one point overnight the Aussie fell to as low as .7075, nearing levels it was trading at prior to the release of last Thursday’s bumper Australian jobs report for October.
According to Richard Grace, chief currency and rates strategist & head of international economics at the CBA, all attention today is likely to be on the RBA.
“This morning, the minutes of the RBA’s 3 November board meeting, where speculation was higher than usual that the RBA may lower interest rates, are released,” wrote Grace in his morning note.
“The RBA minutes will provide some colour on the thinking of the RBA board. The minutes may detail how much discussion (if any) was given to the consideration of a rate cut. The risk is the minutes appear somewhat dovish, and AUD/USD eases somewhat.”
Before the RBA minutes are released at 11.30am AEDT, markets will also digest remarks from RBA assistant governor Christopher Kent who will speak in Sydney from 8.30am AEDT.
On the data front the weekly ANZ-Roy Morgan consumer confidence index will be released at 9.30am AEDT, although it’s not expected to be market moving. There is also little to speak of from the regional data calendar.
Here’s the current Aussie dollar scoreboard.
- AUD/USD 0.7089 , -0.0038 , -0.53%
- AUD/JPY 87.32 , 0.22 , 0.25%
- AUD/CNY 4.5157 , -0.0229 , -0.50%
- AUD/EUR 0.6633 , 0.0012 , 0.18%
- AUD/GBP 0.4662 , -0.0014 , -0.30%
- AUD/NZD 1.0911 , 0.0038 , 0.35%
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