The Australian dollar is struggling to recover after Tuesday's RBA-induced plunge

Photo by Mark Kolbe/Getty Images

The Australian dollar is largely unchanged from where Asia left it on Tuesday this morning, continuing to hover around the US76 cent level.

Here’s the scoreboard as at 8am AEST.

AUD/USD 0.7603 , 0.0003 , 0.04%
AUD/JPY 86.13 , 0.05 , 0.06%
AUD/CNH 5.1744 , 0.0022 , 0.04%
AUD/EUR 0.6699 , 0.0002 , 0.03%
AUD/GBP 0.5882 , 0.0001 , 0.02%
AUD/NZD 1.0431 , 0.0009 , 0.09%

With US traders enjoying the Independence Day holiday, the Aussie traded in a thin range overnight, steadying after a sharp plunge following the release of the Reserve Bank of Australia’s (RBA) July monetary policy statement.

“While no one expected a change in the cash rate, the market was clearly priming itself for more, something that could be inferred as at least having a partly hawkish tilt,” said David de Garis, economist at the National Australia Bank.

There was the expectation of a half move away from the RBA’s neutral monetary policy bias after recent comments from the Bank of Canada and others over the past fortnight.

“Instead, the RBA was not drawn in to the prospect of even half hinting removing some monetary accommodation and adding fuel to local and global yields and the AUD.”

The Aussie was also pressured by news that North Korea had staged a successful missile test earlier in the session, thought to be an intercontinental ballistic missile.

Combined, it left the Aussie nursing the heaviest losses of any major currency for the session.

AUD/USD 5-Minute Chart

After a hectic start to the week, the data calendar slows noticeably today, hinting that technicals, geopolitics and sentiment will dictate where the Aussie will head next.

There’ll be a raft of services PMI’s released today, including in Australia, China and Europe.

Other data highlights include eurozone retail sales along with factory orders, revised durable goods orders, Empire State manufacturing index and weekly API crude inventories from the US.

If there is to be a surprise on Wednesday it will likely come from the release of the US Federal Reserve’s June FOMC meeting minutes.

However, even then, de Garis of the NAB isn’t expecting that there’ll be much for traders to mull over.

“Having had the Fed’s new forecasts, Yellen presser and a full exposition of the proposed QE wind-down process, can there be too much more that would really surprise the market?,” he said.

Given the quiet calendar, movements in US bond yields, the Japanese yen — often influential on the US dollar index in Asia — and Chinese commodity futures stand out as the factors most likely to drive the gyrations in the Aussie today.

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