Aussie dollar shrugs off dovish November RBA minutes
AUD/USD reverses earlier central bank minutes driven loss. EUR/USD continues its advance on mixed EU and US economic data. Sterling wilts ahead of TV debates.
The Australian dollar has put in a strong reversal of earlier losses that were due to surprise dovish comments contained in the minutes of the Reserve Bank of Australia’s (RBA) November interest rate meeting, a transcript of which was released today during the Australasian trading session.
While the RBA left its official rate unchanged at 0.75%, the central bank revealed in the minutes that a strong case could have been made, and that such a move was seriously considered, for a rate cut at the meeting earlier this month. The RBA is generally expected to cut rates by a quarter percentage point sometime in the first quarter of next year.
AUD/USD fell initially by about 75 pips to $0.677 level on the RBA minutes, but has rallied since, especially as London trading opened. In early New York trade Tuesday, AUD/USD traded as high $0.6835, just shy of the $0.684 level prevailing before release of the RBA minutes
Mixed EU and US economic data
EUR/USD was continuing to push toward major resistance levels around $1.12, but in midday New York trading was just shy of Monday’s high trade of $1.109, a minor resistance level that will need to be breached again with momentum if a major breakout of $1.12 is to occur.
US housing start data showed that the housing sector is picking up steam, contributing to overall GDP growth. Starts were up 3.8% last month, in line with expectations. Housing permits, a leading indicator of residential construction, were up a strong 5% to the highest level since just before the housing crash in 2008.
EU new car registrations last month were at the strongest level in twelve years, but the German manufacturers association released a report saying it expected manufacturing in Europe’s largest economy to contract by 4% this year.
Sterling weaker ahead of debates
GBP/USD was slightly weaker midday in New York ahead of televised candidate debates to be held tonight. Sterling has been testing near the key $1.30 resistance level for the past several weeks, trading Tuesday around the $1.292 level.
IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.
The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.
No representation or warranty is given as to the accuracy or completeness of this information. Consequently, any person acting on it does so entirely at their own risk. Please see important Research Disclaimer.
Please also note that the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.
Start trading forex today
Trade the largest and most volatile financial market in the world.
- Spreads start at just 0.6 points on EUR/USD
- Analyse market movements with our essential selection of charts
- Speculate from a range of platforms, including on mobile
Live prices on most popular markets
- Forex
- Shares
- Indices
See more forex live prices
See more shares live prices
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.
See more indices live prices
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 20 mins.
