Aussie dollar takes a back seat
Announcement posted by de2 Communications 12 Aug 2016
“There's likely some hangover effect from the fact the global central banker policy decisions are finished for the month,” said Stephen Innes, senior currency trader at FX and CD provider OANDA Australia and Asia Pacific.
“The market has entered consolidation mode awaiting the next major catalyst,” he said.
Innes noted that there is a regional knock on effect from comments made by Reserve Bank of New Zealand (RBNZ) assistant governor John McDermott.
“I suspect there is a regional knock on effect from comments made by RBNZ assistant governor John McDermott at the beginning of the European session that suggested the RBNZ was far from a reluctant cutter by implying further rate cuts were in the offing,” said Innes.
However, all eyes are now on US retail sales.
“Given that Aussie positioning is long, and the RBA interest rate outlook is equally dovish, there is likely some element of position squaring in play ahead of tonight’s US retail sales,” said Innes.
Innes noted that currently, the carry trade setting is very friendly with the US Federal Reserve's on hold scenario.
“However, that balance could be swung if the US consumer pocketbooks spent more than expected in July,” Innes added.
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