It was a quiet start to the week for the Australian dollar, trading in a thin range between .7571 and .7609 over the course of Monday’s session.
With little new data to digest, and with traders waiting for the release of February’s US non-farm payrolls this Friday — seen by many as the only data print that could prevent the Fed from lifting rates on March 15 — it appears that markets have now entered a holding pattern ahead of this key release.
Weakness in commodity prices overnight, renewed geopolitical concerns in Asia and Europe, and news that speculators increased their net long positioning in the Australian dollar to the highest levels since November 2016 last week all acted in tandem to keep the Aussie’s under pressure.
Here’s the Aussie dollar scoreboard as at 7.40am AEDT.
- AUD/USD 0.7578 , -0.0016 , -0.21%
- AUD/JPY 86.33 , -0.06 , -0.07%
- AUD/CNH 5.2289 , 0.0023 , 0.04%
- AUD/EUR 0.7161 , 0.0023 , 0.32%
- AUD/GBP 0.6194 , 0.0028 , 0.45%
- AUD/NZD 1.0837 , 0.0061 , 0.57%
Turning to Asian trade on Tuesday, there’s little on the economic data docket that’s likely to create excitement among traders. And that includes the Reserve Bank of Australia’s (RBA) March interest rate decision that will arrive later in the session.
In Australia, the Ai Group’s Performance of Construction index (PCI) for February, along with the weekly Australian consumer confidence index, will both be released at 9.30am AEDT.
It’s unlikely that they’ll generate any volatility in the Aussie.
And that theme is likely to extend to the RBA’s March interest rate decision, says ANZ’s economics team.
“Unusually, the RBA statement will likely have little impact on the AUD today, with currency comment unlikely to change and the board’s bias remaining little changed,” the bank wrote on Tuesday morning.
While that’s reflective of broader market sentiment, for those interested in what’s likely to be said in the March policy statement, this 10-second guide will help bring you up to speed.
Later in the session, markets will also receive the final read of Q4 GDP from the Eurozone along with consumer credit at international trade data from the US.
Given the relatively quiet data calendar, politics, along with movements in US treasury yields and in the USD/JPY, appear the most obvious catalysts to generate volatility during the session.