Aussie near 3-month lows after RBA minutes - Market Overview by FXNET

FxNet

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Australia was in focus today as the Reserve Bank of Australia released its minutes of the last policy meeting. The central bank revealed that while it kept the interest rate unchanged, it did not close off the possibility of reducing the rate further should that be “appropriate to support sustainable growth in economic activity, consistent with the inflation target”.

AUD/USD remained weak today, trading a tight range between $0.8927 and $0.8957, near three-month lows.

The US dollar was flat against the yen and weaker against the euro as market participants prefer not to buy the US currency before a key risk event on Wednesday– the FOMC announcement. The Federal Reserve is about to begin a two-day meeting ending in an announcement tomorrow.

There is growing speculation the Fed will consider scaling back its $85 billion-a-month bond-purchase program. These stimulus measures have tended to devalue the dollar and so the initial reaction to a taper will probably be dollar-buying.

USD/JPY opened in Asia at 103.00 and edged down to 102.97.

The euro bounced back up against the dollar, as investors await a German investor confidence report later. The ZEW survey is forecast to show a rise in confidence. Yesterday, better-than-expected Euro zone manufacturing PMI data also helped support the euro.

EUR/USD opened in Asia at $1.3760 and gained 0.08% to end the session at $1.3772.
 
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