After a brief exploratory probe above the 73 cent level midway through the European session – largely on the back of modest optimism towards China’s GDP reading topping expectations – the selloff in the Australian dollar resumed overnight, with weaker base metals prices and US dollar strength dragging the Aussie lower throughout the US session.
“Overnight base metal prices were mostly lower by up to 2.0% on the London Metal Exchange with nickel down the most,” said CBA senior economist Gareth Aird in a note released earlier this morning. The exception was tin, which rose 0.2%. Iron ore prices were also weaker with the spot price for benchmark 62% fines falling 40 cents to $53.30 a tonne according to Metal Bulletin, approaching levels not seen in nearly three months.
As of 8.30am AEDT, the AUD/USD currently buys .7248, down from the .7270 level of 5pm AEDT on Monday. Well below the overnight high of .7307.
With no major data scheduled today, market attention will turn to the release of the RBA October meeting minutes that will be released at 11.30am AEDT.
“The RBA Board Meeting Minutes are the main point of interest today,” said Ray Attrill, global co-head of FX strategy at the NAB in his morning note.
“The Governor’s post October Board Statement had minimal changes, suggesting the Bank had not changed its view of the economy significantly, and arguably it now had greater confidence in the continuing moderate expansion of the economy with the removal of the qualifier “most of” when describing information suggesting a moderate expansion.”
Attrill suggests that the minutes will provide further colour on the RBA’s discussion. Though the meeting to which they refer pre-dates the recent NAB Monthly business survey, as well as the Labour Market data, which, on face value, came in slightly weaker than what markets had been expecting.
Aside from the RBA meeting minutes, the latest weekly ANZ-Roy Morgan consumer confidence survey will also be released, although it’s not likely to have any meaningful impact on movements in the Aussie.
Here’s the full Australian dollar scoreboard.
- AUD/USD 0.7248 , -0.0001 , -0.01%
- AUD/JPY 86.62 , 0.02 , 0.02%
- AUD/CNY 4.6091 , -0.0006 , -0.01%
- AUD/EUR 0.6396 , -0.0005 , -0.08%
- AUD/GBP 0.4686 , -0.0002 , -0.04%
- AUD/NZD 1.0675 , 0.0013 , 0.12%