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19 May 2015
RBA minutes weigh on Aussie, UK CPI, ZEW – Next in focus
FXStreet (Mumbai) - The Aussie breached 0.80 barrier and dropped after RBA minutes release which showed that the central bank doesn’t rule out further rate cuts. While OZ neighbor, jumped nearly 50 pips and turned in green after upbeat inflation expectations figures. USD/JPY clings to 120 handle and awaits Japan’s GDP estimate and Fed minutes due tomorrow for further direction.
Key headlines in Asia
RBA minutes: Further policy action not limited by absence of guidance
AUD/USD: RBA minutes-led selling breaks bullish trendline
RBNZ's 2y inflation exp for Q2 slightly better
Dominating themes in Asia - centered on JPY, AUD, NZD
A data-packed Asian session, with Japan stocks riding higher on yen weakness while the US dollar defends mild gains across the board, extending yesterday’s strong rebound.
The Aussie trades muted below 0.80 handle, having recovered from 0.7957 lows following RBA minutes suggested that further interest rate cuts are still on the table, even after the bank lowered the cash rate to a record-low 2% at the May meeting. While the NZD/USD pair reversed softer PPI data-led losses and swung back higher above 0.74 mark after NZ inflation expectations continue rising over the next two years, a recent survey shows, soothing policymakers' fears about inflation expectations sliding.
The dollar-yen pair trades in a flat-lining around 120 levels awaiting fresh incentives from a deluge of economic releases from the US as well as Japan.
Heading into Europe - centered on EUR, GBP
A busy EUR calendar awaits EUR, GPB traders with UK CPI and German ZEW likely to emerge the major market movers.
The general view ahead of today’s release of April inflation data from the UK suggests the rate remained unchanged at zero in April, which would be unchanged from both February and March. The core CPI, a less volatile gauge stripped of energy and food prices, is expected to have stayed at 1%.
The German ZEW economic sentiment figure is lined up for today and markets are expecting to see a drop from 53.3 to 48.8 for May. Also due today is the euro zone final CPI reading and the region’s ZEW economic sentiment figure.
The EZ final CPI is expected to remain muted and confirm a flat reading as reflected in the preliminary estimate. While the ZEW figure for Euro zone is expected to decline to 62.4 against a reading of 64.8 last month.
Later in the North American session, US housing data is awaited with watchful eyes as it may have major impact on the USD moves ahead of Wednesday’s FOMC minutes.
EUR/USD Technicals
The AceTrader Team explains, " Euro's sell off from 1.1447 to 1.1229 on Monday signals erratic upmove from March's 12-year trough at 1.0457 has made a temporary top at last Friday's fresh 3-month peak at 1.1467 and as long as 1.1366/70 holds. Choppy trading with downside bias remains for another corrective fall to 1.1255/65 later, however, reckon support at 1.1202 (last Wednesday low) would contain weakness and bring rebound later. On the upside, only a move back above 1.1420/27 would indicate correction over instead, yield gain to 1.1447 and then re-test of 1.1467.”
Key headlines in Asia
RBA minutes: Further policy action not limited by absence of guidance
AUD/USD: RBA minutes-led selling breaks bullish trendline
RBNZ's 2y inflation exp for Q2 slightly better
Dominating themes in Asia - centered on JPY, AUD, NZD
A data-packed Asian session, with Japan stocks riding higher on yen weakness while the US dollar defends mild gains across the board, extending yesterday’s strong rebound.
The Aussie trades muted below 0.80 handle, having recovered from 0.7957 lows following RBA minutes suggested that further interest rate cuts are still on the table, even after the bank lowered the cash rate to a record-low 2% at the May meeting. While the NZD/USD pair reversed softer PPI data-led losses and swung back higher above 0.74 mark after NZ inflation expectations continue rising over the next two years, a recent survey shows, soothing policymakers' fears about inflation expectations sliding.
The dollar-yen pair trades in a flat-lining around 120 levels awaiting fresh incentives from a deluge of economic releases from the US as well as Japan.
Heading into Europe - centered on EUR, GBP
A busy EUR calendar awaits EUR, GPB traders with UK CPI and German ZEW likely to emerge the major market movers.
The general view ahead of today’s release of April inflation data from the UK suggests the rate remained unchanged at zero in April, which would be unchanged from both February and March. The core CPI, a less volatile gauge stripped of energy and food prices, is expected to have stayed at 1%.
The German ZEW economic sentiment figure is lined up for today and markets are expecting to see a drop from 53.3 to 48.8 for May. Also due today is the euro zone final CPI reading and the region’s ZEW economic sentiment figure.
The EZ final CPI is expected to remain muted and confirm a flat reading as reflected in the preliminary estimate. While the ZEW figure for Euro zone is expected to decline to 62.4 against a reading of 64.8 last month.
Later in the North American session, US housing data is awaited with watchful eyes as it may have major impact on the USD moves ahead of Wednesday’s FOMC minutes.
EUR/USD Technicals
The AceTrader Team explains, " Euro's sell off from 1.1447 to 1.1229 on Monday signals erratic upmove from March's 12-year trough at 1.0457 has made a temporary top at last Friday's fresh 3-month peak at 1.1467 and as long as 1.1366/70 holds. Choppy trading with downside bias remains for another corrective fall to 1.1255/65 later, however, reckon support at 1.1202 (last Wednesday low) would contain weakness and bring rebound later. On the upside, only a move back above 1.1420/27 would indicate correction over instead, yield gain to 1.1447 and then re-test of 1.1467.”