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.
This information has been prepared by IG, a trading name of IG Markets Ltd and IG Markets South Africa Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. 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. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
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
Prices above are subject to our website terms and agreements. Prices are indicative only
