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Aussie dollar losing its shine?

Announcement posted by Profile Booster 26 Jul 2016

26 July 2016: MELBOURNE -- The Aussie dollar is trading around 0.7460 levels this morning after struggling through the US session overnight.

“We saw the Aussie retracted to its intraday low of 0.7455 yesterday,” said Adam Taylor, senior trader at FX provider GO Markets.

Taylor added, “Overall the Aussie seems to have lost its shine after creating the recent high of 0.7606 earlier in the month.”

Taylor pointed out that since touching its recent highs, “We are noticing the price slowly grind lower and eroded much of the gains witnessed throughout June.”

For this week, Taylor said the fate of the Aussie dollar will be dictated by two key events: Australia’s CPI inflation data and the US Federal Open Market Committee (FOMC) meeting, both of which are scheduled for Wednesday.

“All the hype surrounding a potential rate cut from the Reserve Bank of Australia will either be exaggerated or quickly extinguished depending on the outcome of Wednesday’s inflation forecast,” Taylor said.

A soft CPI figure reinforces the speculation of a rate cut next week, while a stronger outcome would not only help lift the Aussie but could potentially see the RBA keep rates on hold for the remainder of the   year, Taylor explained.

On the other hand, the FOMC meeting in the US is largely expected to be somewhat of a non-event leaving rates on hold.

“Although traders are not anticipating any surprise moves from the FOMC, they will be dissecting the language used for any shifts in tone. Anything deemed even remotely hawkish could have a detrimental effect on the Australian/ US Dollar cross,” Taylor said.

 

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For more information, visit: https://www.gomarkets.com.au/